Asian Shares Fell as Market Fears for China’s Retaliation

HONG KONG, H.K. – Asian stock market got the bad end of the deal on Friday with shares declining as market players braced for the possible retaliation of China after the US President Donald Trump signed the bill that aims to back the pro-democracy protesters in Hong Kong.

During the afternoon trading session on Friday, the benchmark index of Hong Kong, Hang Seng, dropped a significant 2.1%, marking its deepest fall in two weeks. The CSI 300 of Shanghai and the Shenzhen index in China also tracked about 1.3% decline throughout the trading day.

Further, the Kospi index in South Korea suffered the same fate as it drops on Friday as well amid the central bank in the country, shaving its inflation forecast and growth for 2019.

The Topix index in Japan also slipped by around0.5% after the numbers of the country’s industrial production for October marked its biggest drop after almost two years. The country’s stock market has been largely affected by the tension on the trade talks between the US and China.

Market players in Japan were on edge after President Trump signed two US bills this week to support the pro-democracy protesters in Hong Kong, standing firmly from the previous displeasure of the Chinese government regarding the bill.

Market players are anxious about the possible retaliation from China against the US for passing the Hong Kong bill or how it will affect the signing of phase one of the trade deal which was previously reported as nearing its final throes.

Further, as the initial phase of the US-China trade deal hasn’t been finalized, investors are also on the lookout for the new US-imposed tariffs on Chinese goods which are set to take effect on December 15.

According to the head strategist of the Asian market at AxiTrader, Stephen Ines, traders have been a bit jittery about the volatility in the market as these new trade news come out.

Back on stocks, some of the biggest decliners powering up the decline for Hong Kong stocks were Sino Biopharmaceutical which dipped by 5% and the CSPC Pharmaceutical with a recorded 11.1% decline.

Market players in Asia also didn’t get any backing from Wall Street, which was closed for the Thanksgiving holiday in the US. With Wall Street closed overnight, the liquidity was thin, and treasuries in the US were flat with S&P 500 futures looking at a 0.3% loss on the half-day of trading for Friday.