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Stocks Hesitate Short of New Highs as Sino-U.S. Ties Feel Crack

Asian markets slid Friday, leaving global shares short of an all-time peak as traders turned careful, fearing a new U.S. law supporting Hong Kong protesters may torpedo efforts to conclude the U.S.-China commerce conflict.

MSCI All Country World index, which tracks shares in 49 nations, had been up 0.08% at 548.88, only 0.3% away from an all-time peak hit in January 2018 before the beginning of U.S.-China trade row.

MSCI’s broadest index of Asia-Pacific shares outside Japan tanked 0.9%. Hong Kong led the losses, losing 2.0%. South Korean shares lost 1.2%, and Japan’s Nikkei eased 0.1%.

China’s blue-chips gave up 0.9% a day before the nation reports manufacturing practice, which analysts surveyed expect to have contracted for the seventh straight month in November.

Asian markets were bought off due to uncertainty over how U.S. markets will perceive the latest conflict between the U.S. and China over Hong Kong.

Traders on Wall Street will begin a half-day session on Friday after Thursday’s Thanksgiving holiday. U.S. S&P 500 mini futures were down 0.26%.

China warned the U.S. Thursday it could take “firm counter actions” in response to U.S. legislation strengthening anti-government demonstrators in Hong Kong.

Anthony Chan, chief Asia investment strategist at Union Bancaire Privée in Hong Kong, said the market remains to be erring on the side of caution, particularly as the year-end approaches.

However, on the whole, traders are now betting that while the U.S. legislation spoils the temper, ultimately, it remained in the interest of Washington as well as Beijing to move ahead with discussions to get a trade settlement.

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