Asian shares fall as Huawei arrest imperils China-US truce
SINGAPORE (AP) — World stocks fell on Monday as tensions between the U.S. and China over the arrest of a senior executive of telecoms supplier Huawei raised concerns about talks on trade. Reports that a key Brexit vote could be scrapped added to the uncertainty, pushing down the pound.
KEEPING SCORE: In Europe, Germany’s DAX lost 0.4 percent to 10,740 and the CAC 40 in France declined 0.5 percent to 4,789. Britain’s FTSE 100 rose 0.3 percent to 6,795 as shares in multinationals were boosted by the drop in the pound. Wall Street was set to open lower. Dow and S&P 500 futures were both down 0.3 percent.
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 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: Prime Minister Theresa May will address parliament amid reports that she is considering cancelling a vote to approve the Brexit deal she had struck with the EU. May has been expected to lose the vote by a large margin. Scrapping the vote could lead to several scenarios, including more negotiations to tweak the deal. The pound hit an 18-month low at $1.2660 on the uncertainty.
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 prices edged down after getting a boost by OPEC and other major oil producers’ decision 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 68 cents to $51.93 a barrel. It gained $1.12 on Friday. Brent crude, used to price international oils, shed 61 cents to $61.06. The contract added $1.61 a barrel on Friday.
CURRENCIES: The dollar eased to 112.65 yen from 112.72 yen late Friday. The euro rose to $1.1422 from $1.1379.
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