Asian shares retreat after Trump approval of Hong Kong bill

Asian shares were modestly lower Thursday after President Donald Trump signed a bill expressing support for human rights in Hong Kong.

China reacted with indignation to the legislation, which Congress passed with overwhelming support. Beijing summoned U.S. Ambassador Terry Branstad for a dressing down and issued multiple statements threatening unspecified countermeasures.

In Hong Kong, where sometimes violent protests have dragged on for nearly six months, the Hang Seng index edged 0.1% lower to 26,921.58. The Shanghai Composite index lost 0.5% to 2,889.10.

Trump’s move did not come as a surprise, given the pressure from lawmakers to support the largely symbolic measure. But it’s unclear if the human rights bill, which Beijing views as “meddling” in China’s internal affairs, might derail recent progress in trade talks with Washington.

“We urge the U.S. to not continue going down the wrong path, or China will take countermeasures, and the U.S. must bear all consequences,” the Chinese Foreign Ministry said in a statement.

Markets appeared to be taking the developments in stride, said Stephen Innes of AxiTrader, “on the assumption that the U.S. legislation is unlikely to torpedo phase one. But of course, it does provide a stark reminder that on one level or another, U.S.-China frictions are always going to be a thorn in the markets’ side.”

Japan’s Nikkei 225 index lost 0.1% to 23,409.14 while the Kospi in Seoul shed 0.4% to 2,118.60. Australia’s S&P ASX 200 gained 0.2% to 6,864.00.

India’s Sensex added 0.2% to 41,116.92. Shares fell in Taiwan and most of Southeast Asia.

U.S. futures were modestly lower, with the contracts for both the Dow Jones Industrial Average and the S&P 500 0.3% lower.

U.S. markets will be closed Thursday for Thanksgiving. They’ll be open for a half day on Friday.

On Wednesday, investors capped a day of light trading on Wall Street ahead of the Thanksgiving holiday by serving up another set of stock market record highs.

The S&P 500, Dow Jones Industrial Average and Nasdaq composite closed at all-time highs for the third straight day Wednesday. And the Russell 2000 index of smaller companies hit its highest level in a year.

A batch of positive U.S. economic data helped spur the broad rally, extending the market’s recent string of gains.

Stock indexes have been breaking records in recent weeks as the U.S. and China signaled that negotiations aimed at resolving their costly trade war were going well.

The latest economic data helped keep investors in a buying mood. The Commerce Department said Wednesday that the economy grew at a 2.1% rate last quarter, outpacing forecasts. The government also reported a surprisingly good increase in orders to U.S. factories and a pickup in consumer spending.

“This is an environment where we continue an economic expansion, albeit at a somewhat slower rate,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “There is a very positive sentiment around U.S. equity markets.”

The S&P 500 index rose 0.4% to 3,153.63. The Dow picked up 0.2% to 28,164. The Nasdaq climbed 0.7% to 8,705.18, while the Russell 2000 added 0.6%, to 1,634.10.

Boeing fell 1.5% after federal safety regulators indicated that they will keep full control over approvals of each new 737 Max built. The Federal Aviation Administration’s decision affects more than 300 finished Max jets currently sitting in storage.

The key question in China-U.S. trade negotiations is whether they will be able to reach a deal before Dec. 15, when new tariffs are set to kick in on many Chinese-made items, including smartphones and laptops.

Pressure is building on both sides to complete a limited “phase one” deal before the deadline, though the Trump administration could end up postponing it, as it did in October, to allow more time for talks.

Benchmark crude oil lost 29 cents to $57.82 per barrel in electronic trading on the New York Mercantile Exchange. It fell 30 cents to settle at $58.11 a barrel on Wednesday. Brent crude oil, the international standard, gave up 23 cents to $62.78 per barrel.

The dollar slipped to 109.47 Japanese yen from 109.54 yen on Wednesday. The euro was steady at $1.1007.

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AP Business Writers Alex Veiga and Damian J. Troise contributed.