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GLOBAL MARKETS-Asian shares sink as Hong Kong tensions spoil festive mood

Published 28/11/2019, 05:12 pm
© Reuters.  GLOBAL MARKETS-Asian shares sink as Hong Kong tensions spoil festive mood
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* Hong Kong law dents optimistic mood

* Currencies in slight risk-off mode

* Australia, NZ equities touch record highs, then retreat

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook

SINGAPORE, Nov 28 (Reuters) - Asian share markets fell on Thursday as concerns that tensions over Hong Kong may stymie a U.S.-China trade deal cast a pall over Thanksgiving cheer from positive U.S. economic data.

U.S. President Donald Trump on Wednesday signed into law legislation backing pro-democracy protesters in Hong Kong.

China's Foreign Ministry promptly warned of unspecified "firm counter measures" in response and summoned the U.S. ambassador in Beijing. put a lid on steady gains this week for MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS . The benchmark fell 0.2% on Thursday.

Japan's Nikkei .N225 , Hong Kong's Hang Seng .HSI and Shanghai blue chips .CSI200 flitted in and out of positive territory but turned negative by the afternoon.

E-Mini futures for the S&P 500 ESc1 fell 0.3%, while EUROSTOXX 50 futures STXEc1 fell 0.2%.

The U.S-China tensions over Hong Kong were shrugged off in the Antipodes, though, with Australia's S&P/ASX 200 .AXJO and New Zealand's NZ50 .NZ50 following Wall Street's march to hit record intraday highs. think it could easily get a lot worse," said Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore, as investors await more details on China's response.

"We could potentially see a greater chance of a move downwards based on what happens in the next 24-48 hours."

The next round of U.S. tariffs on Chinese goods is due to take effect on Dec. 15.

Wall Street indexes minted fresh records overnight, buoyed by trade deal hopes and data showing U.S. economic growth picked up slightly in the third quarter, rather than slowing as first reported. Dow Jones Industrial Average .DJI rose 0.15%, the S&P 500 .SPX gained 0.42% and the Nasdaq .IXIC added 0.66%. U.S. markets are closed for Thanksgiving on Thursday. .N

Other data showed the number of Americans filing claims for jobless benefits fell. There are signs the downturn in business investment may be drawing to a close and the U.S. Federal Reserve said the outlook was bright. the U.S. economy may be turning down, to the point where the Fed might have to resume policy easing next year, have been somewhat assuaged," said Ray Attrill, head of FX strategy at National Australia Bank.

"So relief all round."

HONG KONG JITTERS

Currency and commodity markets were more circumspect.

The dollar and trade-exposed currencies were spurned for safe-havens such as the Japanese yen after Trump signed the Hong Kong bills into law.

The laws are viewed as supportive for anti-government protesters in the city, since they threaten sanctions for human rights violations and seek to safeguard Hong Kong's autonomy.

But the move was denounced by China as interference in domestic affairs. displeasing to the Chinese side," said Westpac FX analyst Imre Speizer. "And we are getting close to the point when this deal needs to get signed ... the market's reacting to it as though it might put a snag in the works."

The yen JPY= rose 0.1% to 109.40 yen per dollar, while riskier currencies such as the Australian dollar AUD= fell by the same margin to $0.6764.

The British pound GDP= bobbed higher after a model for pollsters YouGov, which accurately predicted the 2017 election, said Prime Minister Boris Johnson was on course to win a fat majority in parliament at the Dec. 12 election. was 0.1% higher at $1456.26 per ounce. GOL/

U.S. crude CLc1 dipped 0.43% to $57.86 a barrel. Brent crude LCOc1 fell to $63.86 per barrel.

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