Stocks lower as US and China clash over Hong Kong

Stocks lower as US and China clash over Hong Kong

European markets traded lower on Thursday, as investors monitored friction between the U.S. and China over the Hong Kong protests.

The pan-European Stoxx 600 fell by 0.2% at the opening bell, with auto stocks shedding 0.7% to lead losses as the majority of sectors and major bourses entered negative territory.

U.S. President Donald Trump signed into law two bills backing protesters in Hong Kong on Wednesday, setting off a clash with China which had objected to such legislation. China’s Ministry of Foreign Affairs subsequently slammed the move, accusing the U.S. of having “sinister intentions.”

The episode could dash hopes of Washington and Beijing reaching a so-called “phase one” trade deal, which markets had moved higher on earlier in the week.

In Asia, equities wobbled as investors fretted over the potential deterioration in U.S.-China relations. MSCI’s broadest index of Asia-Pacific shares excluding Japan sank about 0.1%.

Back in Europe, traders digested polling data out of the U.K. ahead of a crucial Dec. 12 election. A YouGov poll showed Prime Minister Boris Johnson on course to win a solid majority of 68 seats in Parliament.

In terms of data, investors will likely be on the lookout for euro zone economic sentiment figures due Thursday morning. German inflation data is also expected in the afternoon.

U.S. markets are closed on Thursday for the Thanksgiving holiday.

In terms of individual stocks, Virgin Money jumped 10% after offering a reassuring 2020 outlook, despite missing 2019 full-year profit expectations and cancelling its dividend, according to Reuters.

Johnson Matthey shares dropped 3.8% after J.P. Morgan cut the British chemicals company’s stock to underweight.

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