China has previously expressed anger at US lawmakers voting to back rights and democracy in Hong Kong
London (AFP) - Stock markets slid Wednesday on renewed concerns about a China-US trade deal after US lawmakers passed a bill to support Hong Kong civil rights, sparking anger in Beijing.
In addition, US President Donald Trump threatened more tariffs should a mini trade pact with China fall through.
The dollar was mixed against other major currencies, while the pound was little changed after British Prime Minister Boris Johnson and Labour opposition leader Jeremy Corbyn traded blows in a TV debate ahead of December’s general election.
Oil prices fell further after a hammering Tuesday caused by worries over the trade talks and signs of a further build in US energy inventories.
On the corporate front, Chinese online retail titan Alibaba said it could raise almost $13 billion in Hong Kong’s biggest IPO for nearly a decade after announcing the pricing of its shares for the mega sale.
Shares in German payments firm Wirecard retreated on revelations that a 2017 audit of its troubled Singapore unit could not be completed.
In Washington, the US Senate adopted Tuesday legislation supporting “human rights and democracy” in Hong Kong and threatened to revoke its special economic status.
In reaction, China summoned a US diplomat and threatened countermeasures.
“The global trading wind changed direction on Wednesday with benchmarks across the world drifting lower,” noted ActivTrades analyst Pierre Veyret.
“This shift in investors’ trading stance was caused by the US Senate passing legislation supporting protesters in Hong Kong…. Most investors now fear it could significantly impair negotiations and the signing of a ‘phase-one’ deal with Beijing,” he added.
Also on Tuesday, Trump again raised the spectre of more levies on Chinese goods, warning: “If we don’t make a deal with China, I’ll just raise the tariffs even higher.”
While observers broadly expect the two sides to eventually reach some sort of agreement as part of a wider pact, there have been several bumps in the road, causing anxiety on equity markets.
“The announcement from the US president has hit stock markets,” David Madden, analyst at CMC Markets UK, said on Wednesday.
“Recently we have seen the DAX (index in Frankfurt) at 22 month highs, and the (Paris) CAC 40 at a level last seen in 2007, so the threat from Trump has encouraged traders to exit the equity markets.”
- Key figures around 1130 GMT -
London - FTSE 100: DOWN 1.4 percent at 7,222.01 points
Frankfurt - DAX 30: DOWN 1.0 percent at 13,093.76
Paris - CAC 40: DOWN 0.7 percent at 5,867.95
EURO STOXX 50: DOWN 0.8 percent at 3,668.20
Tokyo - Nikkei 225: DOWN 0.6 percent at 23,148.57 (close)
Hong Kong - Hang Seng: DOWN 0.8 percent at 26,889.61 (close)
Shanghai - Composite: DOWN 0.8 percent at 2,911.05 (close)
New York - Dow: DOWN 0.4 percent at 27,934.02 (close)
Euro/dollar: DOWN at $1.1064 from $1.1078 at 2100 GMT
Pound/dollar: DOWN at $1.2904 from $1.2926
Euro/pound: UP at 85.73 pence from 85.71 pence
Dollar/yen: DOWN at 108.44 yen from 108.54 yen
Brent North Sea crude: UP 0.3 percent at $61.12 per barrel
West Texas Intermediate: UP 0.3 percent at $55.35 per barrel