Categories: world

Stock markets: Huawei exec arrests alarm investors

The main index in Hong Kong fell about 2.5% and Tokyo shares closed 1.9% on Thursday after Canada said Huawei's…

The main index in Hong Kong fell about 2.5% and Tokyo shares closed 1.9% on Thursday after Canada said Huawei’s financial manager, Meng Wanzhou, had been arrested in Vancouver and seeking extradition by the US government. 19659002] Shanghai market fell about 1.7%, while US stock futures pointed down more than 1%. The main index in Europe decreased by about 1% to 1.5% in the morning trade.

The attack by Meng, the daughter of Huawei’s founder, sparked a fear of a new escalation of tension between the United States and China, which reached a violence in its trade war less than a week ago. Uncertainty about whether the two sides can reach a lasting store have driven volatile trading on global markets this week.

Technical shares were among those who carry sales on Thursday.

Huawei is not listed on the stock exchange. However, ZTE (ZTCOF), a Chinese technology company temporarily deprived of a US export ban earlier this year, declined almost 9%. Huawei suppliers AAC Technologies (AACAY) and Sunny Optical (SNPTF) both fell about 6%.

Stephen Innes, head of Asia-Pacific trade with Oanda investment company, linked the losses directly to Meng’s arrest. The news has prompted investors to dump risky assets, he wrote in a note to customers.

The Wall Street Journal reported last month that US officials had informed counterparties in countries such as Germany, Japan and Italy about potential security risks from Huawei equipment. The report was due to a large divestment in more than 1

00 Chinese shares, according to Innes.

“Main Consequences” for Trade War

It is still unclear how Mengs’s case will play, but it can undermine talks between the United States and China aimed at defusing their malicious trade war.

A Huawei spokesman said Meng faces unspecified charges in eastern New York. The Wall Street Journal reported in April that the US Department of Justice investigated whether Huawei violated US sanctions against Iran.

Meng’s arrest has “potentially major consequences” for the trade war and signals that the US government is willing to be tough on Chinese companies doing business with Iran, according to Michael Every, head of Asia-Pacific research at Rabobank Investment Bank.

“It’s as strong a message to China’s elites as a horse head in your bed,” he wrote in a note to customers, referring to a famous scene from the mafia movie “The Godfather”.

Source link

Published by