By Gina Lee
Investing.com – Asian stocks were mostly down on Thursday morning, with investor sentiment soured by mounting tensions between the U.S. and China.
Stocks had enjoyed an almost week-long rally, fueled by investor optimism over the global economic recovery from COVID-19.
Tensions between the two countries rose overnight after the U.S. suspended flights into the U.S. by Chinese airlines effective from June 16, the latest tit-for-tat over China approved the enactment of national security laws in Hong Kong and Macau last month.
The suspension was the U.S. response to an earlier Chinese move to bar American carriers from re-entering China.
China’s Shanghai Composite fell 0.35% by 11:12 PM ET (4:12 AM GMT). Meanwhile, the Shenzhen Component gained 0.11%.
Hong Kong’s Hang Seng Index lost 0.13%, with tension in the city rising ahead of the Legislative Council’s passing of the National Anthem (NYSE:ANTM) bill later in the day.
The city is also planning vigils to commemorate the Tiananmen Square (NYSE:SQ) crackdown.
Japan’s Nikkei 225 was down 0.28%, reversing its earlier gains. South Korea’s KOSPI was up 0.07%.
Down Under, the ASX 200 rose 0.51%. The Bureau of Statistics said that retail sales for April plunged a seasonally adjusted 17.7% in April, a day after it said that GDP fell 0.3% during the first quarter of 2020.