Asian stocks were mixed on Wednesday morning, with shares in the Greater China region down after protestors planned to take to the streets for the second time this week in Hong Kong.
Hong Kong’s Legislative Council will debate a controversial national anthem bill, which triggered the latest round of protests in the city. They re-ignited on Sunday after China tabled a national security law for Hong Kong and Macau at the end of the previous week.
U.S. President Donald Trump said overnight that his administration is “doing something now” to be unveiled later this week.
“It’s something you’re going to be hearing about over the next -- before the end of the week. Very powerfully, I think,” he said.
The Treasury Department could impose controls on transactions and freeze assets of Chinese officials and businesses involved with enacting the law, with visa restrictions for Chinese Communist Party officials also under consideration.
Trump also believed that Hong Kong’s status as a financial hub will be lost if the laws are enacted, with White House Press Secretary Kayleigh McEnany saying during Tuesday’s briefing, “I went directly to the president to get an answer on this, and he said to me that he’s displeased with China’s efforts and that it’s hard to see how Hong Kong can remain a financial hub if China takes over."
Investor risk sentiment soured over fears of mounting U.S.-China tensions.
“Mounting US-China tensions bodes ominous for the global economy amid pandemic fragilities,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.
Hong Kong’s Hang Seng Index dipped 0.47% by 11:24 PM ET (4:24 AM GMT).
China’s Shanghai Composite was down 0.20% and the SZSE Component slipped 0.72%.
Japan’s Nikkei 225 gained 0.39%, reversing some of its earlier losses. The government is preparing a fresh stimulus package of up to JPY 117 trillion ($1.087 trillion), funded by a second supplementary budget raised by issuing an additional JPY 31.9 trillion in government bonds.
South Korea’s KOSPI was up 0.20%. Some analysts forecast that the Bank of Korea would cut a key interest rate further on Thursday to boost the country’s economic recovery from COVID-19.
The ASX 200 rose 0.47%.