Asia report: Huawei CFO arrest sends shockwaves through tech stocks
The arrest of Huawei’s chief financial officer in Canada sent shockwaves through Asian markets on Thursday, with Meng Wanzhou’s likely extradition to the United States fanning the flames of ongoing trade tension between Washington and Beijing.
In Japan, the Nikkei 225 was down 1.91% at 21,501.62, as the yen strengthened 0.43% against the dollar to last trade at JPY 112.70.
Tokyo technology behemoth SoftBank was down 4.93% thanks to a double whammy of negative sentiment.
The firm suffered a serious outage on its domestic mobile network in Japan during the session, and investors were also spooked as the firm was working with Huawei on 5G mobile technology.
Among the other losers on a red Thursday for technology plays in Japan were Advantest, TDK and Tokyo Electron, which were down 5.3%, 6.64% and 4.54% respectively.
On the mainland, the Shanghai Composite lost 1.68% to 2,605.18, and the smaller, technology-heavy Shenzhen Composite was 2.17% lower at 1,350.75.
South Korea’s Kospi slid 1.55% to 2,068.68, while the Hang Seng Index in Hong Kong tumbled 2.47% to 26,156.38.
Among the tech losers in these parts of the world was Seoul’s Samsung Electronics, which was down 2.29%.
Hong Kong names did not fare any better, with AAC Technologies falling 5.59%, Chinasoft International 11.71% lower, and Sunny Optical stumbling 5.47%.
Analysts painted a bleak picture of the arrest of Meng, with Eurasia Group saying that even if the Huawei CFO broke US law, the escalation in enforcement from the feds would only attract a strong response from the People’s Republic.
“The investigation of Huawei could be a prelude to further action against the firm and its senior officials,” Eurasia Group noted.
They also alluded to another recent casualty of Washington’s strong-arming - Chinese mobile tech firm ZTE - saying that if Huawei was slapped with a similar import ban, the fallout would be even more significant.
Oil prices were lower as the region went to bed, with Brent crude last down 2.86% at $59.85 per barrel, and West Texas Intermediate slipping 3.32% to $51.19.
In Australia, the S&P/ASX 200 fell 0.19% to settle at 5,657.70, after fresh economic data showed the country missing forecasts for its October trade surplus.
The official reading came in at AUD 2.3bn, compared to expectations for AUD 3.2bn in a Reuters poll of economists.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.3% lower at 8,758.22, with outdoor equipment brand Kathmandu falling 2.9%.
Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.89% at AUD 1.3878, and the Kiwi retreating 0.35% to NZD 1.4547.