Hong Kong’s Hang Seng index fell on May 28 to close at 23,132.76. Moreover, stocks in the Asia Pacific were mixed due to rising tensions. Notably, Japenese stocks led gains among the major regional markets. The Nikkei 225 gained 2.32% to close at 21,916.31 as shares of index heavyweight Fast Retailing jumped 3.7%. In the meantime, the Topix index added 1.8% to finish the trading day at 1,577.34.
Also, mainland Chinese stocks were mixed on the day, the Shanghai Composite added 0.33% to about 2,846.22 but the Shenzhen Component dropped 0.273% to around 10,653.49.
Australia’s S&P/ASX 200 gained 1.32% to close at 5,851.10. The Reserve Bank of Australia Governor Philip Lower said that it is possible that the economic downturn will not be as severe as earlier thought. His comments helped to boost the index.
Moreover, South Korea’s Kospi index dropped 0.13% to close at 2,028.54.
U.S.-China relations and stocks
Mounting tensions between the U.S and China weighed on investor sentiment. It is not surprising as investors are closely monitoring the situation to learn more about the situation.
According to the U.S. Secretary of State, Mike Pompeo Hong Kong is no longer autonomous from China. This statement raised questions regarding Hong Kong’s favorable trade relationship with the U.S. and how the U.S. will react to this issue.
Two days ago, the House of Representatives passed legislation condemning China for the detention and torture of Uighur Muslims.
Last but not least, on Thursday China’s parliament has backed security legislation for Hong Kong. Let’s have a look at this legislation. According to the information, it would criminalize secession as well as subversion, terrorism, and activities by foreign forces that interfere in Hong Kong. The situation in Hong Kong was from being ideal. The security law could create additional problems for the local authorities.
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