Stocks edge down amid Huawei executive arrest

Source:Reuters Published: 2018/12/7 12:08:40

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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