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=ASIA MARKETS: Tech Stocks Pace Hong Kong Retreat After Huawei CFO’s Arrest

HONG KONG (Dec 06) -- Hong Kong shares slumped on Thursday, with technology companies leading, as news that Huawei’s chief financial officer was arrested in Canada at the request of U.S. authorities renewed concerns about Sino-American relations.

The Hang Seng Index slid 2.6% to 26,117.28 by noon. Technology stocks retreated, with internet major Tencent Holdings sliding 3.6%, while smartphone component suppliers AAC Technologies Holdings and Sunny Optical Technology Group lost 6% and 6.2%, respectively.

Chinese telecommunications equipment maker ZTE fell 5.9%, while personal computer maker Lenovo Group slipped 1.1%. Huawei is unlisted.

Meng Wanzhou, CFO of Huawei and daughter of its founder Ren Zhengfei, was reportedly arrested in Vancouver on Dec. 1 on suspicion the company violated U.S. sanctions on Iran. U.S. authorities are seeking her extradition for her appearance before a federal court in New York, The Wall Street Journal reported, citing people familiar with the matter.

The news comes days after Washington agreed to hold off on raising tariffs on $200 billion worth of Chinese goods for 90 days, following a meeting between U.S. President Donald Trump and Chinese President Xi Jinping at a G-20 summit in Argentina. The Nikkei Asia300 Index was down 2.2%. U.S. equity futures pointed to a weaker opening on Wall Street, after being closed on Wednesday in observance of a national day of mourning for President George H.W. Bush, who died on Friday.

The detention is “renewing pessimism on China-U.S. trade talks,” said Jason Chan, vice head of research at Bright Smart Securities in Hong Kong and likely leading to worries about “a further deterioration in the China-U.S. relationship.” The outcome of the 90-day negotiation period is “very unsure,” and the market is less hopeful China will make concessions following the Huawei incident, he added.

In the mainland, the Shanghai Composite and its Shenzhen counterpart fell 1.3% each. The yuan traded onshore lost 0.3% to 6.8781 against the dollar.

Hopewell Holdings surged 29.3% to HK$34.20 in Hong Kong as they began trading after a three-day halt. The company said Petrus HK has proposed to take the company private at HK$38.80 per share in cash.

Property developer Sunac China Holdings fell 2.1% after reporting a 9% decline in contracted sales for November from a year ago.

Beijing Capital Land slipped 2% following a 7.2% decrease in last month’s contracted sales.

Tencent-affiliate Huayi Tencent Entertainment rose 0.5% after saying it agreed to sell its stake in Beijing Hao You Media Culture for 283 million yuan ($41.1 million).

Packaging products maker Huajun International Group surged 53.1% after saying its unit agreed to acquire two companies engaged in solar module manufacturing for a total of 504.7 million yuan.

I-Cable Communications jumped 10.1% after the television services provider said a unit entered a network development agreement with China Mobile Hong Kong, a unit of China Mobile. The agreement, which is for 20 years, also gives CMHK the option to renew it for five more years. China Mobile shares were down 1.3% amid broad market losses.

- By Amy Lam;; +852 3960 5150
- Edited By Suzannah Benjamin
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- Copyright (c) 2018 Nikkei NewsRise Asia Pte Ltd.