PSEi and the Hang Seng in the Red as HK Bill Becomes Law

MANILA, Philippines – The Hang Seng and the Philippine Stock Exchange Index (PSEi) ended the trading day in the red as the Hong Kong bill was signed into law in the US. European markets were also down as investors brace for the expected fallout.

The PSEi dropped 0.87% or 68.23 points to hit 7,768.88 as the bell ended the day. The index’ All Shares also lost 0.73% or 34.05 points to 4,650.95. The news that US President Donald Trump signed two bills supporting Hong Kong saw 668.515 million shares changing hands. The shares’ values are estimated to be around P5.437 billion.

According to Chris Mangun, AAA Equities head researcher, foreign investors continue to stay away, while most investors are on the fence while the general atmosphere remains sluggish. But Mangun is hopeful that investors in the Philippines will be more confident if the country’s index reaches the 7,750 support level by Friday.

The Hang Seng Index slid down 0.1% to 26,921.58 while the Shanghai Composite dropped 0.5% to 2,889.10. The Nikkei of Japan also went down by 0.1%. The KOSPI also lost 0.4% while Malaysia, Singapore, and Taiwan’s indices traded much lower. Meanwhile, the S&P/ASX 200 of Australia went up by 0.2%.

Trading was light but positive in the US as the country prepares for Thanksgiving. The Dow Jones, Nasdaq, and the S&P 500 all closed the trading day at a high. The Dow rose by 0.2% to 28,164, the Nasdaq saw an increase of 0.7% to 8,705.18, and the S&P 500 climbed 0.4% to 3,153.63.

Like Asia, European markets were also trading lower as investors adopt a wait-and-see strategy over the HK bills’ impact on the US-China trade deal. The Stoxx 600 dropped 0.2% as soon as the trading day began. The automobile industry lost big today as shares went down by 0.7%.

Trump’s decision to sign the House-sponsored bill supporting Hong Kong didn’t come as a surprise. China’s furious reaction to the move was also expected. However, no one can definitively say whether the bill will affect the reported progress made with the trade deal.

Beijing sees the bill as the US “meddling” in the country’s affairs. China has already issued a statement urging America not to progress down what they call the “wrong path.” They also warned that countermeasures would be taken, and the US will “bear all consequences.”

However, world markets seem to be taking a pragmatic approach to recent developments. As one trader explained, they’re working on the assumption the House bill won’t derail “phase one” of the trade deal.