Stock markets traded sideways yesterday after US lawmakers passed a Bill supporting civil rights in embattled Hong Kong, possibly jeopardising delicate Chinese-American trade talks.

Investors, already nervous about the slow progress of the talks, went even more cautious after both houses of Congress overwhelmingly approved the Bill and sent it to be signed by the US President.

“A third day in the red for equity markets as the US-China trade deal, or lack of, continues to dictate market sentiment,” said Craig Erlam, senior market analyst at Oanda trading group, referring to a mostly weaker tone in European markets.

On Wall Street, the Dow Jones index opened a touch lower.

China yesterday accused the US of seeking to “destroy” Hong Kong and threatened retaliation after Congress passed legislation supporting the pro-democracy movement that has thrown the city into nearly six months of turmoil.

Foreign Minister Wang Yi said passage of the Hong Kong Human Rights and Democracy Act “indulges violent criminals” that China blames for the worsening unrest and aims to “muddle or even destroy Hong Kong”.

The city’s main stocks index led the losses yesterday, closing down 1.6 per cent. Among individual shares, investors cheered the market debut of stock in France’s State-owned lottery monopoly, with eager buyers pushing the stock up more than 15 per cent in the opening minutes of trading.