Stocks in Asia declined on Thursday as bills backing protesters in Hong Kong were signed into law by U.S. President Donald Trump on Wednesday.
Mainland Chinese stocks declined on the day, with the Shanghai composite 0.47% lower at about 2,889.69 and the Shenzhen component shedding 0.27% to 9,622.14. The Shenzhen composite slipped 0.259% to approximately 1,597.85.
Hong Kong-listed shares of Alibaba continued to see strong gains as they soared 5.59% following their blockbuster debut on Tuesday, ahead of the broad market as the Hang Seng index closed 0.22% lower at 26,893.73.
Elsewhere, the Nikkei 225 in Japan closed 0.12% lower at 23,409.14 while the Topix index finished its trading day 0.17% lower at 1,708.06. Shares of Panasonic surged 2.82% after the Nikkei Asian Review reported Thursday that the firm will sell its semiconductor business to Taiwan's Nuvoton Technology.
Overall, the MSCI Asia ex-Japan index was 0.24% lower.
Trump signed into law two bills backing protesters in Hong Kong, according to a White House statement. That move came despite past objections by China amid ongoing trade negotiations between Beijing and Washington for an anticipated "phase one" deal.
Hong Kong's government on Thursday voiced strong opposition to the move, saying it will send the wrong signal to protesters, Reuters reported.
"I don't think it makes (the deal) less likely," Todd Mariano, U.S. director at Eurasia Group, told CNBC's "Squawk Box" on Thursday. "It's certainly an unwanted speed bump, i think, for the White House as it's trying to close out this deal."
"Hong Kong being such an issue of strategic national significance … for China and Trump having facing such an overwhelming vote in Congress, you know, puts him in a very difficult spot … on an issue that is extremely sensitive for the Chinese leadership," Mariano said.
Market sentiment has gotten a boost in recent days amid positive rhetoric on the U.S.-China trade front. On Tuesday, Trump said negotiators were close to reaching an initial trade deal. Trump's upbeat comments on trade followed a phone call between officials from the U.S. and China. The negotiators agreed to keep working on remaining issues.
"I think at the moment, right now, the markets are still giving the benefit of the doubt," Ken Wong, Asia equity portfolio specialist at Eastspring Investments, told CNBC's "Capital Connection" on Thursday.
"You're not only hearing some positive or strong signals coming from the U.S. but you're also hearing some strong signals coming from China as well," Wong said. "The markets are anticipating, hopefully in the next couple of months, we do get an agreement in place."
Overnight stateside, stocks rose in yet another record session. The S&P 500 added 0.4% to close at 3153.64 while the Nasdaq Composite ended its trading day 0.7% higher at 8705.18. The Dow Jones Industrial Average gained 42.32 points to close at 28,164. The averages posted fresh intraday records and notched their fourth straight day of gains.
Markets were bolstered by stronger-than-expected U.S. economic data. Durable goods orders rose 0.6% in October, while economists expected a decline of 0.8%. Weekly jobless claims, meanwhile, fell to 213,000 from 227,000. Third-quarter GDP was revised to show growth of 2.1% — up from a previous reading of 1.9%.
Meanwhile, the Federal Reserve's summary of economic conditions — better known as the Beige Book — showed the central bank saw the economy expanding modestly between October and mid-November.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.313 after touching highs above 98.4 yesterday.
Oil prices declined in the afternoon of Asian trading hours, with international benchmark Brent crude futures shedding 0.28% to $63.88 per barrel. U.S. crude futures slipped 0.59% to $57.77 per barrel.
— CNBC's Fred Imbert contributed to this report.