European and Chinese stocks driven down by the new Hong Kong legislation
European stocks entered a selling wave in early trading on May 22. The market has been spurred by the new Chinese legislation, which might cancel the special semi-autonomous status of Hong Kong.
By 07:05 GMT the British FTSE lost 1.7%, French CAC 40 dropped 1.1% and German DAX tumbled 1.2%.
This night Chinese government revealed its plans to introduce its newest security laws to Hong Kong. The decision will limit the autonomy of the region.
The prospect already caused new tensions in US-China relations. President Trump warned, that the United States will oppose the legislation “very strongly”. The Senate has already published a bill that would put sanctions against the selected Chinese state officials.
The stocks dependent on China were impacted the hardest. HSBC lost 5%, Standard Chartered tumbled 4%. Luxury markets were impacted as well - Kering lost 1.9% and Richemont dropped 3.4%.