Hong Kong stock market crash after new China security law

0
82


(ABM FN-Dow Jones) Asian stock markets headed lower on Friday morning, with the heavy losses in Hong Kong especially noticeable after China presented a new security law for the region.

The Hang Seng index lost 4.6 percent this morning, with real estate, financials and infrastructure-related stocks especially under pressure, with losses rising to 8 percent.

Other stock markets in the Asian region also fell sharply, following the red price signs on Wall Street on Thursday evening. The Japanese Nikkei index lost 0.7 percent, the Shanghai Composite nearly two percent.

A “security law” for Hong Kong was presented this morning at the annual People’s Congress in Beijing, which, if adopted, would prohibit foreign interference and state-undermining activities, among other things.

This makes it more difficult to hold an opposition in Hong Kong.

Last year, the former British Crown Colony was the scene of months of demonstrations, after the pro-Chinese government in Hong Kong announced stricter security laws.

“The proposed Hong Kong security bill is rightly leading to uncertainty in the financial markets today, as risks of an increase in tensions between the US and China increase, while investors also fear new protests in Hong Kong,” analysts said. Japanese Mizuho Bank this morning in a comment.

US President Donald Trump said that concrete details about the security law are still missing and warned that the issue will be “very harsh” if China passes the law.

US senators say they intend to come up with their own bill to penalize Chinese agencies and government officials for enforcing security laws on the one hand, and penalize banks that do business with those agencies on the other.

CIO Ankit Khandelwal of Maitri Aasset Management said the markets are currently navigating between poor macroeconomic data and trade tensions on the one hand, and government support measures on the other. “The tension between the United States and China may determine the direction of the markets in the short term,” Khandelwal thinks.

Friday kicked off the annual meeting of the People’s Congress of China. China has not issued a growth target for the first time in a long time. Since 1994, the People’s Congress has issued a growth estimate at its annual meeting.

Beijing said it will reach a budget deficit of at least 3.6 percent of gross domestic product this year, compared to 2.8 percent in 2019. This puts China above the 3 percent that it actually aims for.

Chinese Prime Minister Li Keqiang pointed out “some factors that are difficult to predict”.

ABMFNABM Financial News; [email protected]; Editors: +31 (0) 20 26 28 999.

Share this article via:








Source link
https://www.beursduivel.be/Beursnieuws/553987/Beurs-Hongkong-onderuit-na-nieuwe-veiligheidswet-China.aspx

LEAVE A REPLY

Please enter your comment!
Please enter your name here