May 29, 2020 / 8:52 AM / a month ago

Hong Kong stocks end May lower on Sino-U.S. tensions over security law

* HK->Shanghai Connect daily quota used 4%, Shanghai->HK daily quota used 1.4%

* HSI -0.7%, HSCE +0.1%, CSI300 +0.3%

* FTSE China A50 -0.2%

May 29 (Reuters) - Hong Kong stocks fell on Friday to end the month lower amid rising Sino-U.S. tensions as Beijing passed a national security legislation for Hong Kong.

** At the close of trade, the Hang Seng index was down 171.29 points, or 0.74%, at 22,961.47. The Hang Seng China Enterprises index rose 0.1% to 9,561.03.

** For the week, HSI was up 0.1%, while HSCE gained 1.4%.

** For the month, HSI shed 6.8%, while HSCE lost 4.8%.

** U.S. President Donald Trump is due to announce later on Friday his response to the Chinese parliament’s advancement of security legislation for Hong Kong, which many lawyers, diplomats and investors fear could erode the city’s freedoms.

** Hong Kong’s government warned Washington that withdrawing its special U.S. status, which has underpinned the city as a global financial hub, could be a “double-edged sword” and urged the United States to stop interfering in internal affairs.

** The news that Washington is currently crafting a range of options to punish China would inevitably weigh on Hong Kong stocks, analysts at China Galaxy International said in a report.

** Expectations of stimulus measures to shore up China’s economy, however, helped provide some support.

** China has room to stimulate an economy trying to recover in the wake of the coronavirus pandemic, but the government does not want to open the “floodgates”, Premier Li Keqiang said on Thursday at the end of the annual meeting of the parliament.

** Around the region, MSCI’s Asia ex-Japan stock index dropped 0.09%, while Japan’s Nikkei index fell 0.18%

** The yuan was quoted at 7.147 per U.S. dollar at 08:20 GMT, 0.03% weaker than the previous close of 7.1447.

** At close, China’s A-shares were trading at a premium of 25.96% over Hong Kong-listed H-shares. (Reporting by the Shanghai Newsroom; Editing by Vinay Dwivedi)

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