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China, HK shares slump tech leads losses after Huawei CFO arrest
HONG KONG: Sharp losses in technology shares pulled down benchmark stock indexes in China and Hong Kong on Thursday, after the global chief financial officer of Chinese technology giant Huawei was arrested in relation to alleged violations of US sanctions.
The arrest could drive a wedge between China and the United States just days after President Donald Trump and President Xi Jinping agreed to a temporary truce in their trade war to give the two sides more time for negotiations.
Meng Wanzhou, one of the vice chairs on Huawei's board and the daughter of company founder Ren Zhengfei, was arrested in Vancouver and is facing extradition to the United States, a Canadian Justice Department spokesman has said.
The arrest is related to violations of U.S. sanctions, a person familiar with the matter said, though officials have so far stayed mum on her allegations.
The news sent shares of technology companies and hardware suppliers tumbling. Huawei is one of the world's largest makers of handsets and telecommunications network equipment.
In Hong Kong, the Hang Seng's IT hardware index and the sub index for tech firms finished the morning 3.5 percent lower.
By midday, CSI300's sub index for IT stocks was down 2.7 percent. The wider CSI IT index was down 2.3 percent, while the CSI's All Share Telecom index lost 3.7 percent.
The tech rout and renewed trade worries pulled the Shanghai Composite index down 1.3 percent to 2,615.82 points, and the blue-chip CSI300 index fell 1.6 percent.
Chinese H-shares listed in Hong Kong ended the morning down 2.8 percent, and was trading 3 percent lower at one point. The Hang Seng fell 2.6 percent to 26,117.28 points.
"The impact (in the market) is quite big because we just had the Trump-Xi meeting, and people were expecting a 90-day honeymoon," said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong, referring to Beijing and
Washington's agreement last weekend to refrain from adding tariffs on each other in the next couple of months.
While another Chinese tech company, ZTE, fell foul of the U.S. sanction regime, "no arrest was made back then," Yip added, reflecting the seriousness of the Huawei saga.
Ben Kwong, director of research at KGI Asia in Hong Kong, noted Huawei was not the only reason for scepticism in the market.
"People are just as worried about further adjustments in the U.S. stock market, the inverted yield curve and a slowing economy there," he said. - Reuters
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Discussions
Be the first to like this. Showing 32 of 32 comments
Just take a breather of trade wars comes the arrest of Huawei CFO. What the hell is Trump doing...
2018-12-06 18:59
for doing business with Iran....can arrest CFO one.......what is the world coming to?
is Trump American President and President of 7 billion people?
2018-12-06 19:02
America talks the good talk...but in reality a thug, a rogue nation, a pariah.
2018-12-06 19:04
This CFO is only arrested for dealing with Iran!...why? he American citizen meh?
China CFO also can arrest?
2018-12-06 20:50
She was arrested because she violate sanction against Iran!....and that is the point.....what the F...Trump President of 7 billion people?
2018-12-06 20:53
no excuse...America is a thug nation...talk the good talk, but is a thug nation, a pariah and a rogue nation.
2018-12-06 20:58
This is whole Trumpee thing is ridiculous.
so why they choose Hua Wei?.....they scared , very scared.
2018-12-06 21:00
U all still blur blur ah... trump is the new dictator.. not US.. hes mr.worldwide alrdy pitbull also have to move aside
2018-12-06 21:02
Bull is Dead > Dec 6, 2018 09:03 PM | Report Abuse
Huawei is looking at business collapse if she is found guilty!
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its law of the jungle....
2018-12-06 21:06
All US chip makers cannot supply to Hua Wei already.
Not only parts. The handphone has a lot of patents. Even Microsoft owns a lot of handphone patents after buying Nokia. Still owns these patents.
US companies that owns the handphone patents must now ALL terminate their licensing agreements with Hua Wei.
2018-12-06 21:07
all Chinese phones use Google too....
f....
that why China is forced to accelerate make in China 2025.....
by then America can tapao....
2018-12-06 21:13
Aiyoyo US ADP employment drop a lot wo, many kena sack 99 due to trade war effect, company sure want to cut cost liao aiyoyo
2018-12-06 21:18
all these self inflicted pain on the world economy can make America Great again meh?
2018-12-06 21:18
y Nicholasming91 > Dec 6, 2018 09:18 PM | Report Abuse
Aiyoyo US ADP employment drop a lot wo, many kena sack 99 due to trade war effect, company sure want to cut cost liao aiyoyo
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unintended consequences and collateral damage.
2018-12-06 21:19
US keep trying to brain wash us for entering recession era.. but emerging market Asia for the past few years getting stronger.. then us cause drama to slow down the economy.. they will do everything just to stop China from becoming No.1
2018-12-06 21:23
d by henry888 > Dec 6, 2018 09:25 PM | Report Abuse
that is US always do like to loss loss situation.
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its in their genes...Korea, Vietnam, Iraq, now China
2018-12-06 21:28
Agreed. A nation with big muscle everything do is right. Just like accusing of Iraq with destructive nuclear. At the end, nothing was found.
2018-12-06 21:41
taiko....under cover, always talk the good talk and actually biggest thug in the world....they call it marketing.....
2018-12-06 21:43
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why stop at CFO?
must also arrest CEO!
2018-12-06 14:18