Tags: China | Financial Markets

Asian Shares Fall as Huawei Arrest Risks China-US Fallout

Monday, 10 December 2018 05:56 AM

Shares fell in Europe and Asia on Monday after China demanded the release of a senior executive of telecoms supplier Huawei Technologies, as the two sides prepared for negotiations on trade and other issues.

KEEPING SCORE: In Europe, Germany's DAX lost 1.0 percent to 10,684.93 and the CAC 40 in France declined 0.7 percent to 4,778.18. Britain's FTSE 100 dropped 0.4 percent to 6,753.57. Wall Street was set to open lower. Dow futures fell 0.4 percent to 24,345.00. The broader S&P 500 futures shed 0.4 percent to 2,625.90.

ASIA'S DAY: Japan's benchmark Nikkei 225 slid 2.1 percent to 21,219.50 after revised data showed its economy shrinking by a worse-than-expected 2.5 percent in the third quarter. South Korea's Kospi fell 1.1 percent to 2,053.79. Hong Kong's Hang Seng shed 1.2 percent to 25,752.38 and the Shanghai Composite index was 0.8 percent lower at 2,584.58. Australia's S&P/ASX 200 declined 2.3 percent to 5,552.50. Shares fell in Taiwan, Singapore, Indonesia and the Philippines.

HUAWEI ARREST: China slammed the detention of Huawei chief financial officer Meng Wanzhou on Dec. 1 as "extremely egregious" and demanded that the U.S. cancel an order for her arrest, the official Xinhua News Agency reported. She is suspected of trying to evade U.S. trade curbs on Iran. A bail hearing for Meng, who was arrested while changing planes in Vancouver, Canada, was set to resume on Monday. In a meeting with Terry Branstad, the U.S. ambassador to Beijing, Vice Foreign Minister Le Yucheng urged Washington to "immediately correct its wrong actions" and vowed to take further steps depending on the U.S. response, Xinhua said. The two countries recently agreed to hold off on imposing further tariffs for 90 days while they attempt to resolve a range of issues from trade to technology development.

ANALYST'S TAKE: Although the Huawei arrest "falls under the purview of independent courts, the timing of it is unfortunate and could jeopardize the truce that was just agreed," Chang Wei Liang of Mizuho Bank said in a commentary. "Markets have correspondingly responded by reducing risk on the table, waiting to assess the extent of any political fallout."

BREXIT: British lawmakers will vote Tuesday on a Brexit deal approved by Prime Minister Theresa May and the 27 other European leaders. May is expected to lose the vote by a large margin. On Monday, European Union's top court ruled that Britain can "revoke unilaterally" on its notification to leave the bloc, which could rally pro-EU supporters as the March 29 scheduled exit date nears.

SLOWING CHINESE EXPORTS: China's exports rose 5.4 percent to $227.4 billion in November over a year earlier, customs data released on Saturday showed. This is a broad decline from the 12.6 percent surge in the previous month. Imports climbed 3 percent to $182.7 billion, compared with a 20.3 percent jump in October. The numbers suggest a deepening slowdown in the world's second-largest economy that could weigh on global growth.

ENERGY: Oil futures settled after the OPEC cartel and other major oil producers agreed to reduce production by 1.2 million barrels a day starting from January. The cuts will last for six months. U.S. benchmark crude fell 4 cents to $52.57 a barrel. It gained $1.12 to $52.61 a barrel in New York on Friday. Brent crude, used to price international oils, rose 39 cents to $62.06. The contract added $1.61 to $61.67 a barrel in London.

CURRENCIES: The dollar eased to 112.70 yen from 112.72 yen late Friday. The euro rose to $1.1416 from $1.1379.

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Asian markets were broadly lower Monday after China protested the arrest of a senior executive of Chinese electronics giant Huawei, who is suspected of trying to evade U.S. trade curbs on Iran.
Financial Markets
Monday, 10 December 2018 05:56 AM
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