Republican and Democratic U.S. senators said on Thursday they would introduce legislation to impose sanctions on Chinese officials for violating Hong Kong’s independence, after Beijing moved to impose a new security law on the former British colony. The bill, to be introduced by Republican Senator Pat Toomey and Democrat Chris Van Hollen, would also impose secondary sanctions on banks that do business with entities found to violate the law guaranteeing Hong Kong’s autonomy. A Chinese official said on Thursday that China is set to impose new national security legislation on Hong Kong after last year’s pro-democracy unrest, drawing a warning from President Donald Trump that Washington would react “very strongly.” “This bipartisan legislation will impose serious penalties on those working to strip Hong Kong of its autonomy,” Van Hollen said in a statement. Members of Congress from both parties have been taking a more aggressive tone on China as President Donald Trump has ramped up a war of words with Beijing over responsibility for the global coronavirus pandemic.
Hong Kong shares tumbled on Friday after Beijing moved to impose a new security law on the city after last year’s pro-democracy unrest, risking fresh protests and further straining fast-deteriorating U.S.-China ties. Hong Kong’s Hang Seng index fell 3.7% to a seven-week low, helping to pull down MSCI’s broadest index of Asia-Pacific shares outside Japan 1.2%. Japan’s Nikkei slipped 0.25%, while South Korea’s Kospi fell 0.7%. China is set to impose new national security legislation on Hong Kong, a Chinese official said on Thursday. The decision drew a warning from President Donald Trump that Washington would react “very strongly” against the attempt to gain more control over the former British colony. Earlier this month, the U.S. State Department delayed a report to Congress assessing whether Hong Kong enjoys sufficient autonomy from China to continue receiving special treatment from the United States. Washington has ramped up criticism of China over the origins of the coronavirus pandemic. Last week, it moved to block global chip supplies to blacklisted telecoms equipment giant Huawei Technologies, while the U.S. Senate passed legislation that could prevent some Chinese companies from listing their shares on U.S. exchanges. The euro was unchanged at $1.0945. The yen hardly budged at 107.58 per dollar after the Bank of Japan unveiled its own version of the U.S. Federal Reserve’s “Main Street” lending programme to channel more money to small businesses. The Chinese yuan was steady at 7.1387 per dollar. Oil prices eased slightly but were headed for a fourth straight week of gains, on more evidence that fuel demand is recovering as countries ease business and social restrictions that were imposed to counter the coronavirus pandemic. U.S. crude futures ticked down to $33.53 per barrel, down 1.2% on the day though they still still retained weekly gains of 13.6%.
India’s Reliance Industries said KKR will invest $1.5 billion in Jio Platforms, marking the fifth fundraising deal in a month by its digital unit and bringing the total amount of new investment to $10 billion. Other recent investors in Jio Platforms, which houses movie, music apps and telecoms venture Jio Infocomm, include Facebook Inc, General Atlantic, Silverlake and Vista Equity Partners. The purchase of the 2.32% stake in Jio Platforms for 113.67 billion rupees is KKR’s biggest investment in Asia, Mumbai-headquartered Reliance said in a statement. The deal pegs Jio Platform’s equity value at 4.91 trillion rupees and its enterprise value at 5.16 trillion rupees, the same valuation at which General Atlantic bought a stake in the unit just days earlier. The deals will help the oil-to-telecoms giant meet its target of eliminating $21.4 billion in net debt this year. It also plans to sell $7 billion in new shares. KKR, founded in 1976, has invested more than $30 billion in tech companies, including China’s ByteDance and Indonesian digital payments firm GoJek.
Gold steadied on Friday as an escalation in U.S.-China tensions underpinned bullion’s safe-haven appeal, although positive economic data and easing lockdowns in some countries set up the precious metal for a weekly drop. Spot gold was trading at $1,727.39 per ounce by 0248 GMT, having dropped 1.4% on Thursday. U.S. gold futures rose 0.3% to $1,726.50. Bullion had rallied to its highest since October 2012 on Monday, but has since lost ground and is now heading for a 0.8% weekly decline. “The fundamentals are still supportive for gold. But, there was a slight improvement in the manufacturing activity in Europe and the U.S., thAsian shares fell after Beijing’s plan to impose a new national security legislation on Hong Kong drew a warning from U.S. President Donald Trump.e PMI data last night was slightly better,” said Avtar Sandu, a senior commodities manager at Phillip Futures. The euro zone economy’s contraction eased in May, the Purchasing Manager Index survey showed. Germany’s private sector recession also improved on loosening of lockdown curbs that were put in place to prevent the spread of the coronavirus. Asian shares fell after Beijing’s plan to impose a new national security legislation on Hong Kong drew a warning from U.S. President Donald Trump. Gold has held ground above the key $1,700 per ounce level, building impetus to reach its 2011 peak in the coming quarters, Fitch Solutions said in a note.
Oil prices slumped on Friday after China’s decision to omit an economic growth target for 2020 renewed concerns that the fallout from the coronavirus pandemic will continue to depress fuel demand in the world’s second-largest oil user. Brent crude fell $1.56, or 4.3%, to $34.50 a barrel by 0323 GMT, after gaining nearly 1% on Thursday. West Texas Intermediate crude dropped by $1.79, or 5.3%, to $32.13 a barrel, having gained more than 1% in the last session. China’s National People’s Congress kicked off a week-long meeting on Friday with the government saying it omitted the 2020 target, while pledging to issue 1 trillion yuan of special treasury bonds to support companies and regions hit by the pandemic. Abandoning the growth target “could be interpreted as putting less focus on infrastructure investment and could be viewed as negative for oil,” said Stephen Innes, chief global market strategist at AxiCorp. “The commodity market, in general, was looking for a bigger infrastructure pump from the NPC so there is bound to be an element of disappointment,” he said.