Asia Stocks Fall Led by Slide in Hong Kong Shares: Markets Wrap

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Asia Stocks Fall Led by Slide in Hong Kong Shares: Markets Wrap(Bloomberg) -- Stocks in Hong Kong led most Asian shares lower Monday, after two protesters were shot by police during the morning commute. U.S. equity futures dipped as investors parsed the latest developments in the trade conflict.Hong Kong’s Hang Seng Index lost more than 2% as the tensions flared. Shares in Shanghai also retreated and the yuan edged lower, while traders also kept an eye on Alibaba’s Singles’ Day for a gauge of consumer health in China. Japanese shares were flat at the lunch break. The yen climbed with gold as havens caught a bid. Contracts on the S&P 500 retreated after the U.S. benchmark index eked out another record high on Friday. Veterans’ Day in the U.S. means no Treasuries trading.The latest ramp up in turmoil on Monday in Hong Kong has reminded investors of the geopolitical risks that linger. Meantime, data over the weekend showed Chinese factories are threatening to drag down prices around the world as producer prices dropped for a fourth month in October. Alibaba’s sales event kicked off with a bang, with 136 billion yuan ($19 billion) of purchases in less than five hours. The world’s biggest shopping event could help investors gauge how willing Chinese consumers are to spend as economic growth threatens to slip below 6% and the trade war drags on.“We are cautious on the situation” in Hong Kong, Patrik Schowitz, global strategist at JPMorgan Asset Management, said on Bloomberg TV. “It’s not an area where we as global investors and allocators would be looking to take a huge amount of risk.”An easing of economic worries and signs of progress toward an interim trade deal had helped lift risk assets, with global equities rising the past five weeks. President Donald Trump said trade talks with China are moving along “very nicely” and Beijing wants a trade deal “much more than I do.” There is now a risk that market prices already account for a partial U.S.-China deal, said Oliver Pursche, a market strategist at Bruderman Asset Management LLC.“I do get the sense that we are very close to a trade deal,” he told Bloomberg TV. But “we don’t know what the phased reduction of tariffs looks like. There is a risk of disappointment there.”In Spain, the Socialists are set to win the greatest number of votes from Sunday’s election, but the fragmented results point to weeks of negotiations for party leader Pedro Sanchez if he is to form a government.Meantime, Saudi Aramco will allow investors to start bidding for shares starting on Nov. 17. The firm said it’ll provide the number and percentage of shares sold at a later stage, with book-building kicking off this week.Elsewhere, the pound fluctuated after the U.K.’s sovereign credit rating was placed on negative outlook by Moody’s Investors Service, which said the country’s ability to set policy has weakened in the Brexit era along with its commitment to fiscal discipline.Here are some key events coming up this week:Earnings include Tencent, Nissan Motor, Japan Post Bank and Mitsubishi UFJ.New Zealand’s policy decision is due Wednesday, with market pricing tilting in favor of an interest-rate cut.Fed Chairman Jerome Powell addresses the Joint Economic Committee of Congress, in Washington Wednesday. Minneapolis Fed President Neel Kashkari speaks in La Crosse, Wisconsin.Thursday brings China retail sales and industrial production data.U.S. retail sales on Friday are forecast to rebound in October after unexpectedly falling the prior month. The health of American spending is key to extending the record-long expansion.These are the main moves in markets:StocksJapan’s Topix index was little changed as of 11:30 a.m. in Tokyo.Hong Kong’s Hang Seng fell 2.2%.The Shanghai Composite Index dropped 1%.Futures on the S&P 500 slipped 0.3%. The underlying gauge added 0.3% on Friday.Australia’s S&P/ASX 200 Index added 0.6%.South Korea’s Kospi index lost 0.8%.CurrenciesThe yen rose 0.2% to 109.07 per dollar.The offshore yuan slid 0.2% to 6.9992 per dollar.The euro bought $1.1020, little changed.BondsThe yield on 10-year Treasuries added three basis points to 1.94% on Friday. Futures were flat.Australia’s 10-year yield remained at 1.29%.CommoditiesWest Texas Intermediate crude oil slid 0.7% to $56.87 a barrel.Gold rose 0.3% to $1,463.04 an ounce.To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net;Sybilla Gross in Sydney at sgross61@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Andreea Papuc, Joanna OssingerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


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