Stocks retreat as unrest in Hong Kong adds to nerves

Bloomberg

Stocks in Europe slid on Monday along with US equity-index futures as traders awaited further developments on the trade front, while turmoil in Hong Kong added to the risk-off mood. Gold and the yen climbed.
Banks and miners led the Stoxx Europe 600 index lower, and futures on the S&P 500 gauge also fell after President Donald Trump said that America hasn’t yet reached an agreement with China and emphasized that he wouldn’t eliminate all tariffs. Hong Kong’s Hang Seng Index lost almost 3% on a violent day of demonstrations. Shares in Shanghai retreated, while Japanese stocks were little changed. Veterans’ Day in the US means no Treasuries trading.
The unrest in Hong Kong is reminding investors of lingering geopolitical risks as US-China trade talks drag on. Data over the weekend showed Chinese factory-gate prices dropping for a fourth month, heightening concern about the effect of the trade war on the world’s second-biggest economy. Still, Alibaba’s sales event kicked off with a bang, helping investors gauge how willing Chinese consumers are to spend as economic growth threatens to slip below 6%.
“Looking further ahead this week, we can expect to see further fallout” amid trade balance, manufacturing and industrial-production data for some of
the world’s biggest economies,
said Siobhan Redford, a Johannesburg-based economist at FirstRand Bank Ltd. “If these figures reflect further deterioration in economic activity, we can expect markets to continue to trade weaker.”
Elsewhere, the Socialists are set to win the greatest number of votes from the election in Spain, but the fragmented results point to weeks of negotiations for party leader Pedro Sanchez if he is to form a government. Crude oil retreated from a seven-week high.
New Zealand’s policy decision is due on Wednesday, with market pricing tilting in favour of an interest-rate cut.
Fed Chairman Jerome Powell addresses the Joint Economic Committee of Congress, in Washington on Wednesday. Minneapolis Fed President Neel Kashkari speaks in La Crosse, Wisconsin. Thursday brings China retail sales and industrial production data. US retail sales on Friday are forecast to rebound in October after unexpectedly falling the prior month.
Futures on the S&P 500 Index decreased 0.4% in London time. The Stoxx Europe 600 Index decreased 0.3%. The Shanghai Composite Index decreased 1.8%. The MSCI Emerging Market Index sank 1.2%.
The Bloomberg Dollar Spot Index was little changed at. The euro advanced 0.1% to $1.103. The British pound climbed 0.2% to $1.2802. The onshore yuan decreased 0.2% to 7.007 per dollar. The Japanese yen climbed 0.3% to 108.97 per dollar. Germany’s 10-year yield declined one basis point to -0.27%.
West Texas Intermediate crude decreased 1.5% to $56.41 a barrel.

HK’s $530b stock rally buckles amid protests
Bloomberg

Hong Kong stocks fell the most since early August as protests escalated after police shot and wounded a protester on Monday morning.
The Hang Seng Index dropped 2.6%, with local landlords plummeting. Police fired tear gas in the centre of the business district to disperse chanting office workers who were blocking roads.
Signs that optimism over a potential US-China trade deal has been overdone added to the bearish sentiment. The MSCI Hong Kong Index slumped 3% and the local dollar weakened.
The abrupt drop in the city’s stocks — the worst in Asia — follows a half trillion dollar rally that drove a measure of buying momentum to its highest level in almost nine months and pushed the Hang Seng Index above its 200-day moving average.
The shooting came as protesters called for a city-wide strike following the death of a student who fell from a parking garage amid a police dispersal operation.
The city’s railway operator suspended parts of some lines amid mass vandalism and universities cancelled classes.
Police had earlier said two protesters were shot.