Stocks Hit By Trade Doubts, Hong Kong Unrest

European and Asian stock markets dropped Wednesday after US President Donald Trump left investors hanging over prospects for progress in trade talks with China

London, (UrduPoint / Pakistan Point News - 13th Nov, 2019 ):European and Asian stock markets dropped Wednesday after US President Donald Trump left investors hanging over prospects for progress in trade talks with China.

Asian trading suffered also from violent Hong Kong protests that showed no sign of letting up.

In a much-anticipated speech on Tuesday, Trump hailed a strong US economy and said a trade deal was close, but also warned he could ramp up tariffs if things did not go his way.

Global equities have been gaining strength for weeks on optimism the economic superpowers will unveil a mini deal as the first part of a wider agreement.

But with a planned signing ceremony between Trump and Xi Jinping seemingly pushed back to December and scant news of fresh developments, traders are becoming nervous.

"We're close. A significant phase one trade deal with China could happen, it could happen soon," Trump said at the Economic Club of New York.

But he then warned: "If we don't make a deal, we're going to substantially raise those tariffs".

Trump added: "That's going to be true for other countries that mistreat us too." The remarks were seen as a big letdown for markets -- which had hoped he would provide some updates on the trade talks -- after being jolted by Trump's denial of China's claim last week that the two had a plan to remove some tariffs as negotiations progress.

"European markets are following their Asian markets sharply lower today, following somewhat disappointing comments from Donald Trump," said Joshua Mahony, senior market analyst at trading firm IG.

"Trump's appearance at the Economic Club of New York was hoped would provide markets with a boost, yet he instead chose to warn of the threat that tariffs would be ramped up again if no deal were struck with China." In late morning deals the London stock market index dropped by 0.7 percent, Paris fell by 0.5 percent and Frankfurt was off by 0.

8 percent.

On foreign exchange markets, the pound showed little reaction to official data showing that UK annual inflation dropped faster than expected in October to a near three-year low at 1.5 percent.

- Hong Kong's night of rage - Underscoring global gloom was concern about fresh unrest in Hong Kong after the city suffered a night of rage as months of protests enter a more violent phase.

Police warned that the rule of law there was on "the brink of total collapse".

Hong Kong's Hang Seng Index plunged by 1.8 percent, having shed a similar amount on Monday before staging a small rebound on Tuesday.

Bloomberg News said speculation on trading floors that Alibaba's plans for a $15 billion share sale in the city -- which reports said Wednesday had been approved by regulators -- could be affected by the unrest.

The firm had already called off a summer listing owing to the protests and the China-US trade war.

Regionally, investors worry that the increasingly violent demonstrations could lead China to step in.

Elsewhere, the New Zealand dollar rallied more than one percent after the country's central bank held interest rates steady, confounding expectations for a cut.

- Key figures around 1130 GMT - London - FTSE 100: DOWN 0.7 percent at 7,317.78 points Frankfurt - DAX 30: DOWN 0.8 percent at 13,182.36 Paris - CAC 40: DOWN 0.5 percent at 5,890.33 EURO STOXX 50: DOWN 0.6 percent at 3,689.40 Tokyo - Nikkei 225: DOWN 0.9 percent at 23,319.87 (close) Hong Kong - Hang Seng: DOWN 1.8 percent at 26,571.46 (close) Shanghai - Composite: DOWN 0.3 percent at 2,905.24 (close) New York - Dow: UNCHANGED at 27,691.49 (close) Pound/dollar: UP at $1.2852 from $1.2845 at 2100 GMT Euro/pound: DOWN at 85.67 pence from 85.70 pence Euro/dollar: UP at $1.1013 from $1.1009 Dollar/yen: DOWN at 108.93 yen from 109.01 yenBrent North Sea crude: DOWN 1.2 percent at $61.33 per barrelWest Texas Intermediate: DOWN 0.9 percent at $56.31