|A woman stands in front of a panel displaying the afternoon trading on the Hang Seng Index, after Beijing's plans to impose national security legislation in Hong Kong, May 22, 2020. Reuters|
Wall Street and European stocks ended mixed Friday following heavy losses in Hong Kong over China's push for a national security law that drew rebukes from the United States and Europe.
On the first day of its rubber-stamp parliament's congress, China unveiled proposals to strengthen "enforcement mechanisms" in Hong Kong after the city was last year rocked by seven months of massive ― and sometimes violent ― pro-democracy protests.
Hong Kong's main stock index closed down more than 5 percent, with financials and property firms battered as investors fretted about the city's economic future.
"Riots in the street and plummeting real estate markets might be the least of Hong Kong's building wall of worry as this authoritarian national security plan will most certainly bring into question (the city's) status as a global banking center," said Stephen Innes of AxiCorp.
Beijing's move drew sharp criticism from US Secretary of State Mike Pompeo, while the European Union called for "the preservation of Hong Kong's high degree of autonomy."
Later Friday, the US announced sanctions against a Chinese government institute and eight companies for human rights violations against Uighurs and other minorities in China's western Xinjiang region.
While market watchers expect US President Donald Trump to continue to attack China as his re-election campaign heats up, investors are skeptical he will take action that threatens the trade detente with Beijing.
Adding tariffs on Chinese goods would hit US consumers and "the market is skeptical Trump will risk that before November," said Gregori Volokhine of Meeschaert Financial Services.
US stocks finished mostly higher, with the tech-rich Nasdaq Composite Index leading major indices, gaining 0.4 percent to finish at 9,324.59, an increase of more than 3.4 percent for the week.
European bourses finished the session little changed.
But the rising US-China tensions weighed on the oil market, which was also pressured by China's move to avoid offering a 2020 growth target in light of the coronavirus's disruptions.
The Chinese government usually sets economic growth targets that it then exceeds.
The move underscores the damage to the global growth outlook, with China's economy hit not only by the pandemic but by weaker conditions in key export markets such as the United States and Europe. (AFP)