Asian equities mostly fell Wednesday as profit-taking and worries about deteriorating China-US relations outweighed optimism over the gradual reopening of economies around the world. Hong Kong fell as investors kept tabs on planned protests in the city that many fear could erupt into the worst violence since last summer. The broad trend across global markets has been upward for weeks as virus deaths and infections ease in most countries and governments begin to reopen their battered economies, fanning hopes for a recovery in the second half of the year. Confidence has also come from mind-boggling amounts of stimulus and central bank pledges of support, with the latest coming from the eurozone, where European Commission President Ursula von der Leyen is due to unveil a trillion-euro revival plan for the bloc. However, there was little fresh desire for risk assets with eyes on the simmering row between the world’s top two economies, fuelled by Donald Trump’s barracking of China over its role in the pandemic, and made worse this week by Beijing looking to tighten its grip on Hong Kong. Hong Kong was thrown back into the spotlight Friday when Chinese officials proposed a controversial security law that many fear could ring the death knell for the city. And Trump appeared to agree, with his press secretary Kayleigh McEnany telling a briefing he had said it is “hard to see how Hong Kong can remain a financial hub if China takes over”. Washington has already said it could terminate its preferential trading status over the issue. Markets are also fretting over reports that the US has warned it will impose sanctions on Chinese entities and officials if it goes ahead with the law. Hong Kong worries Meanwhile, there are concerns about another flare-up in the city as lawmakers prepare to discuss a law that bans insulting China’s national anthem. Seven months of sometimes violent demonstrations last year hammered the local economy even then raised questions about its future. Hong Kong fell 0.8 percent, Shanghai lost 0.2 percent and Seoul was off 0.1 percent, while Singapore dropped 0.5 percent. Kuala Lumpur dropped more than one percent as Malaysia struggles to contain its virus, while there were also losses in Jakarta and Taipei. However, Sydney and Wellington eked out gains. Still, National Australia Bank’s Tapas Strickland, said in a note: “Risk sentiment continues to surge as activity lifts following the gradual easing of containment restrictions around the world, while vaccine hopes remain high with 10 different vaccines currently at the human trial stage.” He also cited comments from Federal Reserve official James Bullard that the third quarter “very likely, right behind the worst quarter, will be the best quarter of all time on the growth perspective”. Wall Street, where the New York Stock Exchange trading floor reopened after two months of closure, finished higher, with the Dow gaining 2.2 percent. Oil markets slipped on China-US tensions, and after reports said Russia could begin easing up on its supply cuts in July. Massive reductions by Moscow and other major producers including Saudi Arabia have helped fuel a surge in prices over the past month, with WTI doubling since the end of April. But analysts said the commodity will likely continue to win support from the easing of lockdowns, which is expected to boost demand as people get back on the road.