=ASIA MARKETS: Asian Stocks Slide As Huawei Arrest Revives Trade War Fears
HONG KONG (Dec 06) -- Asian stocks fell Thursday, led by losses for the technology sector, as the arrest of a senior executive at telecommunications-equipment maker Huawei in Canada at the request of the U.S. raised fresh concerns over Sino-American trade relations.
The Nikkei Asia300 Index fell 2.4% to 1,212.28, while U.S. equity futures pointed to a weaker opening on Wall Street. The Japanese yen, considered a safe-haven asset, climbed 0.4% against the dollar.
The news of Huawei CFO Meng Wanzhou’s arrest in in Vancouver on Dec. 1 comes days after the U.S. and China agreed to a temporary truce in an ongoing trade spat. The arrest was made 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.
“We do not believe China will tolerate the arrest of a CFO,” Laban Yu, an equity analyst at Jefferies, wrote in a note. “We would not be surprised if high pressure tactics of ‘going after’ Huawei misfired due to communication lapses and bureaucratic inertia. If so, we believe the U.S. and Canada have limited time to rectify the error. If not, the trade negotiations are in serious jeopardy, in our view.”
While Huawei is unlisted, its supplier and regional heavyweight Samsung Electronics fell 2.3% in Seoul. ZTE, a telecommunications-equipment maker and a smaller rival to Huawei, declined 5.9% in Hong Kong.
Other technology heavyweights in the region also fell, with Taiwan Semiconductor Manufacturing and Hon Hai Precision Industry shedding 2.7% and 3.6%, respectively, in Taipei.
SK Hynix declined 3.2% amid broad market losses. The company named Chief Operating Officer Lee Seok-Hee as its new chief executive officer on Thursday.
Pegatron, a supplier to Apple, slipped 5.3% in Taipei. The company has chosen Indonesia for its first diversification of manufacturing away from China, Nikkei Asian Review reported, citing a source with knowledge of the plan. The company plans to shift production of non-iPhone products hit by U.S. tariffs on Chinese exports to a factory in Indonesia within six months, the report said.
Energy producers CNOOC and PetroChina fell 2% and 2.2%, respectively, after Brent crude prices edged lower ahead of an Organization of Petroleum Exporting Countries’ meeting in Vienna this week.
Malaysian oil and gas services firm Sapura Energy jumped 6% after saying its consortium secured a contract to develop an offshore platform for about three billion ringgit ($720 million) in India from Oil and Natural Gas. ONGC shares fell 2.5% in Mumbai.
AirAsia Group edged 1.6% lower in Kuala Lumpur. The low-cost carrier on Thursday said it signed a pact “reaffirming” its intention to set up a low-cost carrier in Vietnam with local partners. AirAsia didn’t provide details of what the pact entails.
- By Carrie Chen; Carrie.Chen@nikkeinewsrise.com; +852 3960 5150
- Edited by Suzannah Benjamin
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