Hong Kong tensions rattle world stock markets, oil tumbles

  • Hong Kong tensions rattle world stock markets, oil tumbles

Hong Kong tensions rattle world stock markets, oil tumbles

The US announced sanctions against a Chinese government institute and eight companies for human rights violations following China's move to impose a national security law to quash the pro-democracy movement in Hong Kong.

Trade relations between USA and China are also under scrutiny as President Donald Trump appears to be taking a more hardline stance against Beijing ahead of his re-election bid in November. The S&P 500 index was down 8.63 points at 2,939.88, while the Nasdaq composite was down 15.65 points at 9,269.23.

US stock indices moved in a flat-to-low range today as simmering Sino-US tensions weighed on markets struggling to gauge the pace of economic recovery from Covid-19. Energy stocks fell the most as crude oil prices closed lower after six straight gains.

The Nasdaq Composite Index opened at 9,278.55 points, down 6.33 points, or 0.07 percent.

USA stocks closed mixed on Friday, but the Dow Jones industrial average still posted its best week since the five-day period ended April 10.

Trading was subdued ahead of the Memorial Day holiday in the U.S.

The run-up over the past week and more than 30 per cent climb since the late March lows is confirmation that investors think that a recovery is on its way despite concerns about a second wave of COVID-19 infections, said Kurt Reiman, chief investment strategist for BlackRock Canada.

"Anything that knocks China's growth rate, whether it's a slower recovery from the coronavirus or a rise in tensions with the USA, will weigh on global growth expectations", said Seema Shah, chief strategist at Principal Global Investors. Smaller rival Pinduoduo Inc's US-listed shares gained 1% after posting upbeat earnings report.

Benchmark U.S. crude oil fell 2% to settle at $33.25 a barrel.

"I still think this is going to be a hard period for oil because even if the economy is reopened, it doesn't mean that behaviourally people are just going to go back to the way things were". China also decided not to set a GDP target for 2020 as the coronavirus continues to inflict damage on the world's second-largest economy, following a bill the Senate passed earlier in the week that would potentially delist Chinese stocks from USA exchanges.

Benchmark 10-year U.S. Treasury yields fell 0.2 basis points to 0.6574%. Alberta's Western Canadian Select fell about two-and-a-half per cent to US$24.02 per barrel.

The S&P 500 index inched up 0.2% after having been down 0.5%. "We've seen unprecedented support from policy makers and that's what's been driving the recent gains, and reopening of major economies".

Oil prices deleted $1.51 to $32.41 USA a barrel. On Thursday, President Donald Trump said the U.S. would react strongly if China were to enact the legislation.

The Canadian dollar was under pressure against its American counterpart, down almost half a cent to 71.22 cents U.S.