Concerns about China imposing laws over Hong Kong sent Asian shares spinning southwards overnight, and UK equities have followed suit. Our Trader writer Neil Wilson says: 'Shares in Hong Kong plunged on fears Beijing’s tough stance will spark fresh pro-democracy protests, potentially leading to the kind of wide scale unrest we saw last year. The Hang Seng slid over 5 per cent as China imposes controversial national security legislation that bypasses local lawmakers. The move was taken as China’s National People’s Congress convenes. Carrie Lam, the Hong Kong chief executive, says the territory will fully cooperate with China.
This is a potentially significant flash point that will stir local protests and will anger the US. At a time of already strained relations between China and the West, this decision will only isolate Beijing even more. Investors will need to add renewed Hong Kong-Beijing tensions into their mix of geopolitical risks, whilst the way it fits into the broader US-China rivalry will be closely watched. The risk-off tone fed into European trading with the FTSE 100 off almost 2 per cent at 5900 in early trade on Friday.' For Neil's full article, click here.
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