TOKYO, Nov 21 — Global shares slid today as a fresh row between Washington and Beijing over US bills on Hong Kong could complicate their trade negotiation and delay a “phase one” deal that investors had initially hoped to be inked by now.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.16 per cent while Japan’s Nikkei dropped 0.25 per cent.

US S&P500 futures dropped 0.2 per cent in early Asian trade, a day after MSCI’s broadest gauge of world stocks fell 0.4 per cent, the biggest fall since early October.

On Wall Street, all three major indexes fell, with the S&P 500 losing 0.38 per cent.

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The US House of Representatives yesterday passed two bills intended to support protesters in Hong Kong and send a warning to China about human rights.

The legislation, which has angered Beijing, has been sent to the White House for President Donald Trump to sign or veto amid delicate trade talks with Beijing.

Trump is expected to sign the legislation, a person familiar with the matter said yesterday.

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Even if he vetoes, that would be difficult to sustain given that the measures passed both the Republican-controlled Senate and Democratic-controlled House with almost no objections.

“China will surely take this as an interference into its domestic affairs and is likely to think it will no longer need to make concessions on trade,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Trade experts and people close to the White House said completion of a “phase one” US-China trade deal could slide into next year, as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own.

Trump said on October 11 that deal could take as long as five weeks, and investors had initially expected a deal by mid-November.

Asked yesterday about the status of the China deal, Trump told reporters in Texas: “I don’t think they’re stepping up to the level that I want.”

Trade jitters sent the 10-year US Treasuries yield down to 1.747 per cent, near its lowest levels in three weeks and down more than 20 basis points from a November 7 peak of 1.973 per cent, a three-month high.

Similarly in the currency market the yuan hit a three-week low of 7.05 per dollar in offshore trade yesterday and last stood at ¥7.045 per dollar, down about 0.09 per cent in early Asian trade.

The dollar slipped against the yen to 108.46, compared to this week’s high of 109.07 touched on Monday, while safe-haven gold edged up 0.18 per cent to US$1,473.6 per ounce.

The euro was little changed at US$1.1075.

The minutes from the Federal Reserve’s previous policy meeting offered little guidance on what would cause policymakers to change their minds on the outlook after an increasingly divided Fed decided to hit pause in its easing cycle.

Oil prices held firm having surged more than 2 per cent on Wednesday after a better-than-expected US crude inventories report and as Russia said it would continue its cooperation with OPEC to keep the market balanced.

US West Texas Intermediate (WTI) crude futures were down 0.18 per cent at US$56.91 (RM237) per barrel in early today trade. — Reuters