Stocks Tread Water As Hong Kong Bill Fuels Trade Fears

Stock markets traded sideways Thursday after US lawmakers passed a bill supporting civil rights in embattled Hong Kong, possibly jeopardising delicate Chinese-American trade talks

London, (APP - UrduPoint / Pakistan Point News - 21st Nov, 2019 ) :Stock markets traded sideways Thursday after US lawmakers passed a bill supporting civil rights in embattled Hong Kong, possibly jeopardising delicate Chinese-American trade talks.

Investors, already nervous about the slow progress of the talks, went even more cautious after both houses of Congress overwhelmingly approved the bill and sent it to be signed by US President Donald Trump.

"A third day in the red for equity markets as the US-China trade deal, or lack of, continues to dictate market sentiment," said Craig Erlam, senior market analyst at Oanda trading group, referring to a mostly weaker tone in European markets.

On Wall Street, the Dow Jones index opened a touch lower.

China on Thursday accused the United States of seeking to "destroy" Hong Kong and threatened retaliation after Congress passed legislation supporting the pro-democracy movement that has thrown the city into nearly six months of turmoil.

Foreign Minister Wang Yi said passage of the Hong Kong Human Rights and Democracy Act "indulges violent criminals" that China blames for the worsening unrest and aims to "muddle or even destroy Hong Kong".

The city's main stocks index led the losses Thursday, closing down 1.6 percent.

- Sensitive markets - "Recent moves in stock markets seem to be almost solely driven by the latest developments in US-Sino talks," said XTB chief market analyst David Cheetham.

"It's quite remarkable that stock markets in not only New York and Shanghai, but also London and Frankfurt, have such a heightened level of sensitivity in the near term to any news on this front." Among individual shares, investors cheered the market debut of stock in France's state-owned lottery monopoly, with eager buyers pushing the stock up more than 15 percent in the opening minutes of trading.

On the macro front, the OECD grouping of the world's wealthiest nations on Thursday trimmed its outlook for the global economy, saying the world was headed for its weakest economic growth since the 2007-2008 financial crisis.

Urging governments to invest in digital and climate transformation, the Organisation for Economic Co-operation and Development said activity had been hobbled by weaker trade and investment in the past two years, as Trump and Chinese leaders continue to be locked in a trade conflict.