Asian shares set to sag on US-China woes
TOKYO/NEW YORK: Asian shares and U.S. stock futures rose on Thursday as growing optimism about economic recovery from the coronavirus pandemic trumped immediate concerns about a standoff between the United States and China over Hong Kong.Advertisement
However, the biggest risk to equities is the Sino-U.S. relationship, which is likely to worsen after U.S. Secretary of State Mike Pompeo that Hong Kong no longer warranted special treatment under U.S. law. The S&P 500 has leapt about 36per cent since the global coronavirus pandemic dragged it to the year's low on March 23, but there are concerns the rally may be overdone and susceptible to a protracted pullback.Pompeo said overnight that China had undermined Hong Kong's autonomy so fundamentally that the territory no longer warranted special treatment, a potentially big blow to the city's status as a financial hub.
President Donald Trump will now decide how many U.S. economic privileges Hong Kong should still enjoy. Sources have said the U.S. government may suspend Hong Kong's preferential tariff rates for exports to the United States, a far less severe response than formally revoking Hong Kong's special status under U.S. law.Oil futures took a beating as investors fretted about Trump's response to China. U.S. crude oil futures fell 2.68per cent to US$31.93 early Thursday.
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