Shares slip as US political concerns temper trade optimism

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US investment in China's domestic markets is limited - residents had US$203 billion of long-term mainland Chinese financial assets as of June, little more than double that held in South Africa, according to the US Treasury. Japan has seen this movie before in its own struggles with the US over trade policy in the 1980s.

Other Chinese companies which trade on US exchanges, including Huya Inc., a live videogame streaming platform, electric-car maker Nio Inc., iQiyi Inc., a Netflix-type service, internet business Baidu Inc. and Luckin Coffee, the "Starbucks" of China, and e-commerce company Pinduoduo Inc. were all down sharply.

MSCI's world equity index, which tracks shares in 47 countries, fell 0.1% and was heading towards its worst weekly performance since mid-August.

China's yuan currency, traded in offshore markets, fell against the dollar after the news to trade near its weakest against the greenback in about three weeks.

Some market players suspect the dollar was also helped by continued tightness in dollar funding after USA short-term borrowing costs shot up last week.

"The administration is not contemplating blocking Chinese companies from listing shares on United States stock exchanges at this time". London stocks .FTSE added 1%, with exporters buoyed by a weaker pound central bank policymaker hinted at a cut in United Kingdom interest rates.

Over a day after news of the discussions were first reported by Bloomberg, Treasury spokeswoman Monica Crowley released a statement saying: "The administration is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time".

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Oil prices fell on Friday as signs of the rapid return of output from Saudi Arabia, the world's biggest exporter, after a September 14 attack on its production facilities reduced concerns about potential supply disruptions.

"There is still a huge gulf", said Eoin Murray, head of investment at Hermes Investment Management, adding that prospects for a deal had receded from earlier in the year.

Trade tensions between the United States and China do not seem to come to an end.

Major Huawei supplier Micron Technology had fallen 7% in after-hours trade after it forecast first-quarter profit below Wall Street targets.

Underlining market sensitivity, European chipmakers Infineon and Siltronic both fell around 1.5%, mirroring losses for Asian chip-related shares Samsung Electronics and SK Hynix.

Oil prices fell and posted a weekly loss on faster-than-expected recovery in Saudi output, while investors also anxious about global crude demand amid slowing Chinese economic growth.

In a volatile session, Brent crude futures lost 79 cents to $61.95 a barrel.

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