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Hong Kong: Stocks hammered on Huawei fears

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Hong Kong and mainland stocks plummeted Thursday with Chinese technology firms taking the brunt of the selling after a top executive at telecoms giant Huawei was arrested over alleged Iran sanctions breaches by the firm.

[HONG KONG] Hong Kong and mainland stocks plummeted Thursday with Chinese technology firms taking the brunt of the selling after a top executive at telecoms giant Huawei was arrested over alleged Iran sanctions breaches by the firm.

The Hang Seng Index dived 2.47 per cent, or 663.30 points, to 26,156.38.

And the benchmark Shanghai Composite Index fell 1.68 per cent, or 44.63 points, to 2,605.18, while the tech-rich Shenzhen Composite Index, which tracks stocks on China's second exchange, sank 2.17 per cent, or 30.03 points, to 1,350.75.

Just days after Donald Trump and Xi Jinping agreed a ceasefire in their painful trade war, news broke that Huawei chief financial officer Meng Wanzhou had been held in Canada and was facing extradition to the United States.

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Ms Meng is the daughter of company founder Ren Zhengfei, a former Chinese People's Liberation Army engineer.

The company had been investigated by US intelligence, who deemed it a national security threat.

The news has fuelled concerns about already fraught relations between the world's top two economies, with questions beginning to be asked about the strength of the Trump-Xi pact last weekend, which had fuelled a huge relief rally Monday.

China expressed outrage at the arrest, urging Canada and the US to "immediately correct the wrongdoing".

However, later Thursday it appeared to soothe concerns about the trade pact by saying it would "immediately" implement the agreed measures on agricultural products, energy and autos.

Tech security is one of the key sticking points in the months-long trade row, with Washington pointing to security issues.

AFP