Stocks edge down amid Huawei ex­ec­u­tive ar­rest

Global Times US Edition - - BIZMARKETS -

Sharp losses in tech­nol­ogy shares pulled down bench­mark stock in­dexes in China’s mainland and Hong Kong on Thurs­day, af­ter a se­nior ex­ec­u­tive of tech­nol­ogy giant Huawei was ar­rested in re­la­tion to al­leged vi­o­la­tions of US sanc­tions.

The Hang Seng China En­ter­prises In­dex dropped 2.57 per­cent as of 3 pm, while the Shang­hai Com­pos­ite In­dex fell 1.68 per­cent. Tech­nol­ogy stocks were among the hard­est hit in both mar­kets as Huawei sup­pli­ers tum­bled.

Meng Wanzhou, one of the vice chairs on Huawei’s board and daugh­ter of com­pany founder Ren Zhengfei, was ar­rested in Van­cou­ver and is fac­ing ex­tra­di­tion to the US, a Cana­dian Jus­tice De­part­ment spokesper­son has said.

The news sent shares of tech­nol­ogy com­pa­nies and hard­ware sup­pli­ers tum­bling. Huawei is one of the world’s largest mak­ers of hand­sets and telecom­mu­ni­ca­tion net­work equip­ment.

In Hong Kong, the Hang Seng’s IT hard­ware in­dex was down as much as 3 per­cent, and the sub in­dex for tech firms lost 2 per­cent.

CSI300’s sub in­dex for IT stocks was down 2.5 per­cent. The wider CSI IT in­dex was down over 2 per­cent, whereas the CSI’s All Share Tele­com in­dex lost more than 3 per­cent.

The tech rout and re­newed trade wor­ries pulled the Shang­hai Com­pos­ite in­dex down 1.68 per­cent to 2,605.18 points.

The Hang Seng In­dex closed down 2.47 per­cent at 26,156.52.

Ben Kwong, di­rec­tor of re­search at KGI Asia in Hong Kong, noted Huawei was not the only rea­son for skep­ti­cism in the mar­ket.

“Peo­ple are just as wor­ried about fur­ther ad­just­ments in the US stock mar­ket, the in­verted US Trea­sury bonds yield curve and a slow­ing economy there,” he said.

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