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May 29, 2020, 6:54 a.m. EDT

HSBC and Prudential drag down London stocks as investors eye U.S.-China tensions

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By Barbara Kollmeyer, MarketWatch


Getty Images
A screen shows the live broadcast of the vote on a proposal to draft a security law on Hong Kong during the closing session of the National People's Congress, at Tsim Sha Tsui district on May 28, 2020, in Hong Kong, China.

Tensions between China and Hong Kong weighed on London markets on Friday, with investors keeping a close eye on a planned news conference by President Donald Trump, who could announce fresh moves to punish Beijing.

After three days of gains, the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.76%  fell 0.8% to 6,165.49, while the pound was flat at $1.2310.

Companies with sizable operations in Hong Kong reflected the strain on Friday, the day after China passing a new national security law that could curtail Hong Kong’s democratic freedoms. Banking heavyweight HSBC Holdings /zigman2/quotes/208272822/composite HSBC +1.53%   /zigman2/quotes/203901799/delayed UK:HSBA +1.21%  dropped 1.9%, while Prudential /zigman2/quotes/200530572/delayed UK:PRU +0.89%  fell 1.7%.

Expressing unhappiness with China’s move, Trump said he would hold a news conference with regards to that nation on Friday, without revealing details. China’s new law has led U.S. Secretary of State Mike Pompeo to say Washington will no longer treat Hong Kong, already reeling from antigovernment protests and the pandemic, as autonomous from Beijing.

Elsewhere, travel companies and airlines pulled back, with Carnival and easyJet down around 6% each. And oil companies fell as crude prices dropped amid weaker global assets. West Texas Intermediate crude  and Brent crude futures  contracts lost over 2% each. Heavily weighted BP /zigman2/quotes/207305210/composite BP +1.86%   /zigman2/quotes/202286639/delayed UK:BP +0.28%  and Royal Dutch Shell Group /zigman2/quotes/205095589/composite RDS.A +2.97%   /zigman2/quotes/206428183/delayed UK:RDSA +1.23%  dropped over a full percent each.

Shares of Rolls-Royce Holdings /zigman2/quotes/203646520/delayed UK:RR +4.06% tumbled 6%, after S&P Global Rating’s downgraded the engine maker’s credit rating to junk.

“Due to COVID-19’s impact on airlines, aircraft original equipment manufacturers (OEMs), and their supply chains, we now forecast that Rolls-Royce will exhibit materially lower engine sales, receive less cash from engine flying hour related invoices, and see subdued demand for aftermarket services through 2020 and 2021, at least,” said analysts David Matthews and Tuomas E. Ekholm, in a press release.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,095.41
+45.79 +0.76%
Volume: 666,498
July 10, 2020 4:59p
loading...
/zigman2/quotes/208272822/composite
US : U.S.: NYSE
$ 23.88
+0.36 +1.53%
Volume: 3.52M
July 10, 2020 4:00p
P/E Ratio
26.72
Dividend Yield
4.17%
Market Cap
$97.42 billion
Rev. per Employee
$366,224
loading...
/zigman2/quotes/203901799/delayed
UK : U.K.: London
377.80 p
+4.50 +1.21%
Volume: 19.16M
July 10, 2020 4:35p
P/E Ratio
25.36
Dividend Yield
0.00%
Market Cap
£76.94 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200530572/delayed
UK : U.K.: London
1,243.50 p
+11.00 +0.89%
Volume: 3.03M
July 10, 2020 4:35p
P/E Ratio
53.14
Dividend Yield
2.34%
Market Cap
£32.34 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/207305210/composite
US : U.S.: NYSE
$ 22.46
+0.41 +1.86%
Volume: 12.84M
July 10, 2020 4:00p
P/E Ratio
18.78
Dividend Yield
11.00%
Market Cap
$74.01 billion
Rev. per Employee
$4.03M
loading...
/zigman2/quotes/202286639/delayed
UK : U.K.: London
290.80 p
+0.80 +0.28%
Volume: 38.47M
July 10, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
11.41%
Market Cap
£58.45 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/205095589/composite
US : U.S.: NYSE
$ 32.21
+0.93 +2.97%
Volume: 6.24M
July 10, 2020 4:00p
P/E Ratio
13.31
Dividend Yield
8.29%
Market Cap
$120.13 billion
Rev. per Employee
$4.75M
loading...
/zigman2/quotes/206428183/delayed
UK : U.K.: London
1,246.40 p
+15.20 +1.23%
Volume: 3.33M
July 10, 2020 4:35p
P/E Ratio
12.86
Dividend Yield
4.06%
Market Cap
£94.88 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203646520/delayed
UK : U.K.: London
266.70 p
+10.40 +4.06%
Volume: 13.26M
July 10, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
£5.15 billion
Rev. per Employee
N/A
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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