China stocks slump as Huawei shakes sentiment
A gauge of Chinese stocks in Hong Kong posted its biggest two-day drop in 10 months as the arrest of Huawei Technologies Co. Ltd’s chief financial officer (CFO) dealt fragile investor sentiment another blow and deepened uncertainty over China’s relations with the US. The Hang Seng China Enterprises Index dropped 2.6%, while the Shanghai Composite Index fell 1.7%. Technology stocks were among the hardest hit in both markets as Huawei suppliers tumbled. Huawei CFO Wanzhou Meng is facing extradition to the US after her arrest in Vancouver in connection with potential violations by the company of US sanctions on Iran, according to Canada’s department of justice.
Drugmakers tumbled amid concern over price cuts, while the yuan fell for a second day. Chinese drug stocks fell the most since 2009 as investors worried the government is driving down prices for their products via a centralized procurement programme. The MSCI China Health Care Index plunged 8.4%. BLOOMBERG