HK stocks surge on withdrawal of law that sparked protests

A woman walks past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, Sept. 4, 2019. Asian stock markets rose Wednesday following surprise weakness in U.S. manufacturing and wrangling in Britain over the country’s departure from the European Union. (AP Photo/Eugene Hoshiko)
People walk past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo Wednesday, Sept. 4, 2019. Asian stock markets rose Wednesday following surprise weakness in U.S. manufacturing and wrangling in Britain over the country’s departure from the European Union. (AP Photo/Eugene Hoshiko)
A man looks at an electronic stock board showing Japan's Nikkei 225 index and New York Dow Jones index at a securities firm in Tokyo Wednesday, Sept. 4, 2019. Asian stock markets rose Wednesday following surprise weakness in U.S. manufacturing and wrangling in Britain over the country’s departure from the European Union. (AP Photo/Eugene Hoshiko)
People stand in front of an electronic stock board showing Japan's Nikkei 225 index as a car goes by at a securities firm in Tokyo Wednesday, Sept. 4, 2019. Asian stock markets rose Wednesday following surprise weakness in U.S. manufacturing and wrangling in Britain over the country’s departure from the European Union. (AP Photo/Eugene Hoshiko)

BEIJING — Hong Kong stocks surged Wednesday as the government withdrew a proposed extradition law that sparked three months of protests in the Chinese territory.

Hong Kong's benchmark Hang Seng index jumped 3.9% on news of plans for the withdrawal, which Chief Executive Carrie Lam confirmed after markets closed. The protests have disrupted travel, adding to pressure from weakening global trade.

Elsewhere, benchmarks in London, Frankfurt, Shanghai and Tokyo rose following surprise weakness in U.S. manufacturing as Britain's Parliament fought over plans to leave the European Union.

In early trading, London's FTSE 100 gained 0.8% to 7,326.65 and Frankfurt's DAX added 1.3% to 12,063.82. France's CAC 40 added 1.2% to 5,531.36.

The Shanghai Composite Index gained 0.9% to 2,957.41 and Tokyo's Nikkei 225 advanced 0.1% to 20,649.76. The Hang Seng rose to 26,523.23.

The proposed Hong Kong law prompted complaints it would allow crime suspects to be sent to mainland China, where courts are controlled by the ruling Communist Party.

Protesters complained Lam's government and Beijing were eroding the "high degree of autonomy" promised when the former British colony returned to China in 1997.

The protests have broadened to include demands for universal democracy and for Lam to resign.

"Violence might ease in Hong Kong, but the protests are likely to continue" until other demands are met, said Edward Moya of Oanda in a report.

Seoul's Kospi rose 1.2% to 1,988.53 and Sydney's S&P-ASX 200 lost 0.3% to 6,553.00. India's Sensex gained 0.3% to 36,669.76.

Markets in Taiwan, New Zealand and Southeast Asia also advanced.

On Wall Street, futures for the S&P 500 index and the Dow Jones Industrial Average rose 0.9%.

On Tuesday, an index of U.S. manufacturing issued by the Institute for Supply Management, an association of purchasing managers, slid to a 3½-year low of 49.1 last month from July's 51.2.

Softer global demand, aggravated by the U.S.-Chinese tariff war, appears to be hurting American manufacturers. Comments from companies surveyed by ISM pointed to economic uncertainty as a drag on their businesses.

"This is perhaps one of the stronger signs that the U.S. is likewise feeling the weight from the on-going uncertainties alongside the world," said Jingyi Pan of IG in a report.

In London, Parliament was preparing to defy Prime Minister Boris Johnson's plans to leave the European common market even if the two sides fail to agree on future trade and other terms.

The House of Commons planned to confront Johnson over his insistence Britain leave the EU on Oct. 31. Parliament agreed to allow Johnson's opponents to propose a law that would try to block a departure without a deal.

Johnson has said he will call an election to reinforce his position if the lawmakers succeed.

That "could again induce more volatility," said Mizuho Bank in a report.

On Wall Street, technology companies drove a slide in U.S. stocks Tuesday as markets reopened following a holiday weekend and the latest round of tariff hikes by Beijing and Washington on each other's imports.

The S&P 500 lost 0.7% and the Dow lost 1.1%. The Nasdaq composite fell 1.1% to 7,874.16.

AUSTRALIAN ECONOMY: Australia's economic growth fell to a decade low, but the government tried to reassure the public the country wasn't headed for its first recession in 29 years. Data released Wednesday showed the economy expanded by 1.4% in the year that ended in June and 0.5% in the latest quarter. Treasurer Josh Frydenberg told reporters economic fundamentals still are strong and the latest data fail to reflect the impact of cuts in taxes and interest rates.

ENERGY: Benchmark U.S. crude gained 25 cents to $54.19 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.16 on Tuesday to close at $53.94. Brent crude, used to price international oils, gained 14 cents to $58.40 per barrel in London. It lost 40 cents the previous session to $58.26.

CURRENCY: The dollar gained to 106.01 yen from Tuesday's 105.95 yen. The euro held steady at $1.0976.

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