SE Asian stocks slide as US-China spat over Hong Kong dampens trade deal hopes

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(Nov 28): Southeast Asian markets dropped on Thursday on dimming hopes of a Sino-US trade deal after China warned the United States of retaliation for its law backing protesters in Hong Kong.   

US President Donald Trump on Wednesday signed a legislation supporting anti-government protesters in Hong Kong.

However, some analysts say the legislation would not derail trade negotiations, as Trump's signature was expected.

"Had the President vetoed the bill, it would certainly have gone back to both houses where they would have overridden the veto," Jeffrey Halley, senior market analyst at OANDA said in a note.

Halley noted that China needed a trade agreement just as much as the US did, given its lagging economy.

Economists polled by Reuters expect China's factory activity to have contracted for the seventh straight month in November, as domestic demand remained sluggish

The spat over Hong Kong overshadowed positive economic data from the US, which showed that economic growth had picked up in the third quarter, rather than slowing as initially reported.

The Indonesian benchmark extended declines to a sixth session and closed at the lowest level in six months. Heavyweight PT Bank Central Asia Tbk shed 0.8%.

An index of Indonesia's 45 most liquid stocks dropped 1.6%.

Philippine stocks closed 0.9% lower, with SM Investments Corp dropping 1.7%.

Trade-sensitive Singapore stocks closed at their lowest level in a week. Conglomerate Jardine Matheson Holdings slipped 1%.

The Thai index fell for a third straight day, with industrials losing the most.

Airports of Thailand Pcl skid 3.5%, while BTS Group Holdings Pcl dropped 2.1%.

Vietnamese shares fell 0.8%, as financials weighed.