HONG KONG: Asian markets were weighed under by the spectre of sanctions on China after the United States said it does not rule out any further actions on China over concerns about human rights related to China’s Xinjiang region.
This follows comments from Australia and New Zealand’s foreign ministers there was clear evidence of human rights abuses in Xinjiang and the EU’s decision to impose sanctions on four Chinese officials.
China retaliated with sanctions on European lawmakers.
Japan’s Nikkei 225 index retreated 0.61%, Australia’s S&P ASX 200 dipped 0.11%, China’s CSI300 eased 0.95% and Hong Kong’s Hang Seng index underperformed tumbling 1.34%, weighed down by the tech sector as investors mulled the impact of these sanctions. Regionally, the MSCI Asia Pacific index dropped 0.81%.
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The risk aversion boosted demand for US Treasuries with the 10-year yield dropping 6 basis points to 1.63%. The dollar also rose, climbing 0.3% to 92 against a basket of currencies. This brought down the price of gold which fell 0.3% to $1,739 per ounce.
“What’s happening right now in the US government is a complete review of the sanctions strategy, and that’s for every sanctions programme including this one,” said Ginger Faulk, Partner at Eversheds Sutherland.
“Statements by the administration suggest that they want to take a more multilateral approach to countering the China military threat. They recognise that requires coalition-building and they know that means less aggressive use of unilateral sanctions authorities.”
Britain imposed sanctions on Monday on four Chinese officials and a state security body over human rights abuses against the mainly Muslim Uighur community in Xinjiang.
CONTINUED CONCERNS
White House spokeswoman Jen Psaki, speaking to reporters at a briefing, said the United States cannot rule out any further actions on China and that it continued to have concerns about human rights related to China’s Xinjiang region.
Reflecting some of the concerns the Baidu, China’s dominant internet search engine company, made a tepid trading debut on Hong Kong Stock Exchange, underperforming recent big technology listings in the city.
Investor focus is now on the Congressional testimony by Fed Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day as a phenomenon which hasn’t bothered markets for over a decade comes into focus: inflation.
Asia Stocks
- Japan’s Nikkei 225 index retreated 0.61%
- Australia’s S&P ASX 200 dipped 0.11%
- Hong Kong’s Hang Seng index tumbled 1.34%
- China’s CSI300 eased 0.95%
- The MSCI Asia Pacific index dropped 0.81%.
Stock of the day
Smoore International Holdings shares dived 39.3% after China’s regulators’ plan to bring the rules governing the sale of e-cigarettes and other new tobacco products in line with those for ordinary cigarettes. The Ministry of Industry and Information Technology (MIIT), and China’s State Tobacco Monopoly Administration, posted online the draft regulations that could potentially curb a fast-growing industry. It was the second most heavily traded stock on the HKEX. This follows the 48% slump overnight in the prices of rival e-cigarette company RLX Technology on the NYSE.
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