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Asian markets tumble, China tech hit after Huawei arrest
HONG KONG, Dec 6, 2018 (BSS/AFP) – Shares across Asia plunged Thursday,
with technology firms in Hong Kong and Shanghai battered after the arrest of
a top executive at Chinese telecoms giant Huawei that has also fuelled fears
about the recent China-US trade deal.
As Donald Trump and Xi Jinping’s tariffs ceasefire last weekend — which
sparked a one-day rally — fades to a distant memory, investors are back in
selling mood as they fret over a range of issues including the state of the
world economy, oil prices and Brexit.
The chances of trade peace between the US and China took a blow Thursday as
it emerged Huawei chief financial officer Meng Wanzhou had been held in
Canada and faces extradition to the United States over alleged Iran sanctions
breaches by the firm.
Meng is also the daughter of company founder Ren Zhengfei, a former Chinese
People’s Liberation Army engineer.
The company had been investigated by US intelligence, who deemed it a
national security threat.
However, the arrest drew a swift response from China, which said it “firmly
opposes and strongly protests” the move, adding it had urged Canada and the
US to “immediately correct the wrongdoing”.
The news sent shudders through Hong Kong and Shanghai markets, where tech
firms were hammered.
Hong Kong-listed ZTE, which was subject to a US banning order earlier his
year over security fears before that was reduced to a massive fine, was
almost five percent down. Market heavyweight Tencent was two percent lower
and AAC Technologies was five percent off. And in Shanghai, Wingtech
Technology was four percent down, Raisecome Technology sank 2.8 percent and
Fujian Raynen Technology lost 2.6 percent.
Taipei-listed tech firms were also hurt. Taiwan Semiconductor Manufacturing
Company lost 2.2 percent and Hong Hai Precision was 2.7 percent lower.
– ‘Significant’ –
MORE/MR/ 1030 hrs
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There were also losses for other tech firms in the region, with Sony down
three percent in Tokyo and Samsung almost two percent lower. The sector was
already under pressure from concerns about future growth and following a
surge in recent years.
“This headline is quite significant as the US government is attempting to
persuade allies to stop using Huawei equipment due to security fears,” said
Stephen Innes, head of Asia-Pacific trade at OANDA.
“Recall that over 100 Chinese companies traded limit down (last month) when
news broke the US urged allies to blacklist Huawei?”
On broader markets Hong Kong was down more than two percent while Shanghai
lost more than one percent and Tokyo shed 1.8 percent by the break. Taipei
was two percent off, while Manila and Jakarta also took a hit.
Sydney fell 0.5 percent, Singapore gave up 1.2 percent and Seoul was one
percent lower.
“This is what you call playing hard ball,” said Michael Every, head of Asia
financial markets research at Rabobank in Hong Kong.
“China is already asking for her release, as can be expected, but if the
charges are serious, don’t expect the US to blink.”
Oil prices extended losses ahead of the weekend’s meeting of OPEC and non-
OPEC production giants, with investors unsure about how much and for how long
they plan to reduce output.
The commodity has come under selling pressure, having soared Monday and
Tuesday, owing to uncertainty about the reduction plans while Trump has
called on OPEC to lift output to keep prices low.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 1.8 percent at 21,514.98 (break)
Hong Kong – Hang Seng: DOWN 2.3 percent at 26,193.09
Shanghai – Composite: DOWN 1.1 percent at 2,620.84
Euro/dollar: UP at $1.1346 from $1.1312 at 1700 GMT
Dollar/yen: UP at 112.84 yen from 113.47
Pound/dollar: DOWN at $1.2725 from $1.2745
Oil – West Texas Intermediate: DOWN 26 cents at $52.63 per barrel
Oil – Brent Crude: DOWN 19 cents at $61.37 per barrel
New York – Dow Jones: CLOSED for day of mourning
London – FTSE 100: DOWN 1.4 percent at 6,921.84 (close)
BSS/AFP/MR/ 1030 hrs