SEVERE WX : Flash Flood Watch View Alerts

Huawei exec's arrest sends shudders through stock markets

The arrest of a top Chinese tech executive at the request of the United States has sent shock waves through ...

Posted: Dec 6, 2018 12:46 PM
Updated: Dec 6, 2018 12:46 PM

The arrest of a top Chinese tech executive at the request of the United States has sent shock waves through stock markets.

The main index in Hong Kong fell about 2.5% and Tokyo stocks closed down 1.9% on Thursday after Canada said Huawei's chief financial officer, Meng Wanzhou, had been arrested in Vancouver and is being sought for extradition by the US government.

Continents and regions

Crime, law enforcement and corrections

Criminal law

Law and legal system

North America

The Americas

United States

Asia

China

East Asia

Banking, finance and investments

Business, economy and trade

Financial markets and investing

Securities trading

Stock markets

Arrests

Companies

Huawei Technologies Co Ltd

Law enforcement

Canada

Economic indicators

Economy and economic indicators

Stock indexes

Economic policy

International trade

Trade and development

Trade regulation and policy

Trade wars

Shanghai's market slid about 1.7%, while US stock futures were pointing down more than 1%. Major indexes in Europe fell by around 1% to 1.5% in morning trading.

The arrest of Meng, the daughter of Huawei's founder, sparked fears of a new escalation of tensions between the United States and China, which reached a truce in their trade war less than a week ago. Uncertainty about whether the two sides can reach a lasting deal has fueled volatile trading in global markets this week.

Tech stocks were among those bearing the brunt of the selling on Thursday.

Huawei isn't listed on a stock exchange. But ZTE (ZTCOF), a Chinese tech firm that was temporarily crippled by a US export ban earlier this year, slumped nearly 9%. Huawei suppliers AAC Technologies (AACAY) and Sunny Optical (SNPTF) both plunged around 6%.

Stephen Innes, head of Asia-Pacific trading at investment firm Oanda, linked the losses directly to Meng's arrest. The news has prompted investors to dump riskier assets, he wrote in a note to clients.

The Wall Street Journal reported last month that US officials had briefed counterparts in countries including Germany, Japan and Italy on potential security risks from Huawei equipment. That report prompted a major sell-off in more than 100 Chinese stocks, according to Innes.

'Huge implications' for trade war

It's still unclear how Meng's case will play out, but it could undermine talks between the United States and China aimed at defusing their damaging trade war.

A Huawei spokesperson said Meng faces unspecified charges in the Eastern District of New York. The Wall Street Journal reported in April that the US Justice Department was investigating whether Huawei violated US sanctions on Iran.

Meng's arrest has "potentially huge implications" for the trade war and signals the US government is willing to get tough on Chinese companies that do business with Iran, according to Michael Every, head of Asia-Pacific research at investment bank Rabobank.

"It's as strong a message to China's elites as a horse's head in your bed," he wrote in a note to clients, referencing a famous scene from mafia movie "The Godfather."

Article Comments

West Lafayette
Clear
79° wxIcon
Hi: 81° Lo: 63°
Feels Like: 81°
Kokomo
Few Clouds
78° wxIcon
Hi: 82° Lo: 64°
Feels Like: 80°
Rensselaer
Clear
79° wxIcon
Hi: 79° Lo: 60°
Feels Like: 80°
Fowler
Clear
77° wxIcon
Hi: 79° Lo: 63°
Feels Like: 79°
Williamsport
Clear
78° wxIcon
Hi: 81° Lo: 63°
Feels Like: 80°
Crawfordsville
Broken Clouds
76° wxIcon
Hi: 80° Lo: 64°
Feels Like: 78°
Frankfort
Overcast
81° wxIcon
Hi: 79° Lo: 63°
Feels Like: 82°
Delphi
Clear
80° wxIcon
Hi: 81° Lo: 63°
Feels Like: 81°
Monticello
Clear
80° wxIcon
Hi: 84° Lo: 63°
Feels Like: 81°
Logansport
Clear
79° wxIcon
Hi: 79° Lo: 63°
Feels Like: 80°
Patchy Dense Fog Tonight
WLFI Radar
WLFI Temps
WLFI Planner

Community Events