Shares fell in Asia on Friday following a Wall Street rally amid concerns amid U.S.-China tensions.
Benchmarks declined in Hong Kong, Tokyo, and Sydney but rose in Shanghai.
Investors are awaiting a news conference about China by President Donald Trump later in the day.
US and Chinese officials have been making harsh rhetoric in response to the recent outbreak of coronavirus from Hong Kong. One fear is that further friction could lead to another punitive round of rising tariffs between the two countries, which will affect the global economy when it is already in a severe recession due to the coronavirus epidemic.
China’s National People’s Congress on Thursday approved a national security law aimed at suppressing separatist and subversive activity in Hong Kong, rejecting any possible opposition by local lawmakers.
US Secretary of State Mike Pompeo has said the law means that Washington can no longer treat the former British colony, already as autonomous from anti-government demonstrations and epidemics as Beijing. This could weaken the city’s position as a major center for trade and finance.
“The concern is that it grows during the summer,” said Quincy Crosby, chief market strategist at Prudential Financial. “It’s like a match light.”
Hong Kong’s Hang Seng index lost 0.2% to 23,081.67 points on Friday, while Japan’s Nikkei 225 index fell 0.3% to 21,854.00. In South Korea, Kospi slipped 0.1% to 2,26.62 and the S & P / ASX 200 rose 1% to 5,791.60.
The Shanghai Composite Index rose 0.3% to 2,853.69.
Japan’s weak economic data also dropped a pan, as the government reported that industrial production fell more than 9% from the month of April, while retail sales fell about 10% month-on-month. This was the biggest drop since the sales tax increase in 1997.
Overnight, the S&P 500 ended the day down 0.2% at 3,029.73. The Dow Jones Industrial Average fell 0.6% to 25,400.64, and the Nasdaq Composite fell 0.5% to 9,368.99.
Energy producers and banks suffered some sharp losses on Thursday.
Twitter also lost 4.4%. Trump signed an executive order late Thursday, asking if new rules could be imposed on social media companies. It is railing against Twitter as it implemented fact checks in two of its tweets.
Dollar Tree jumped 11.6% for the biggest gain in the S&P 500, as the retailer reported stronger revenue and earnings for its latest quarter than Wall Street. In an encouraging gesture, officials also said that recent trends have improved for the purchase of discretionary items such as trunks and toys, rather than just to fill the hunk.
With Thursday’s loss, the S&P 500 is still on pace for its third weekly gain of at least 2.5% in the last four weeks. After nearly 34% in February and their breathtaking decline for most of March, the Federal Reserve and Capitol Hill began recovering stocks after promising unprecedented amounts of aid to the economy.
Recently, the market has pushed higher as investors move into stocks that would benefit the most from a reopened economy. Governments around the country and around the world are gradually lifting the sanctions to raise funds, leading investors to expect that the worst of the recession has already passed, or will happen soon.
Some analysts have warned the rally, and it may take longer for economies and businesses to recover. This can set investors up for disappointment in the future.
Long-term Treasury yields rose on Thursday when a government report showed that the number of workers filing for unemployment benefits had been submerged for the eighth straight week, although the number remains incredibly high.
Perhaps more importantly, for the market is that the number of continuing claims for unemployment fell from 24.9 million to 21.1 million. This is the first decline since the number of layoffs in March. If this continues, economists said it could be a sign that more people are going back to work as states resume.
The yield on the 10-year Treasury fell from 0.70% to 0.67% late Thursday. This reflects the strength of the economy and sentiment about inflation.
A barrel of US crude for delivery in July declined 43 cents to $ 33.28 a barrel in electronic trading on the New York Mercantile Exchange. It rose 90 cents to settle at $ 33.71 on Thursday.
Internationally, Brent crude gained 27 cents to $ 35.76. In London, it rose 55 cents to $ 35.29 a barrel.
The dollar bought 107.41 Japanese yen, down 107.64 yen late Thursday. The euro rose from $ 1.1073 to $ 1.1087.