The bearish trend settled on the global markets and the red wave spread from Europe to Asia. The detention of the Chief Financial Officer of Huawei, Meng Wanzhou, by the Canadian authorities in Vancouver at the request of the United States hit the markets seriously and turned the indexes to declines.
The authorities in Vancouver arrested Meng Wanzhou at the request of the United States for alleged violations of sanctions against Iran. This is Washington’s last move against the Chinese technology giant Huawei.
Spokesperson of the Justice Ministry in Canada said that Meng Wanzhou was arrested in Vancouver on December 1 and will be brought to the extradition tribunal in the United States. According to the spokesperson, a hearing on whether to be released from a detention facility is scheduled for Friday. Meng Wanzhou, the daughter of Huawei founder Ren Zhengfei, is also vice president of the company.
China urged Canada to release Meng Wanzhou and said it firmly opposes and strongly protests over such kind of actions, which seriously harm the human rights of the victim. The tension between North America and China causes a serious threat to the world economy, as the US-China trade war had already damaged the outlook for future years.
The investors have also followed closely all the events surrounding the preparations for the meeting of the members of the Organization of Petroleum Exporting Countries (OPEC). The cartel met at its headquarters in Vienna on Thursday to decide the direction of its production policy, expecting the parties to vote on Saudi Arabia’s proposal to reduce oil production by 1.4 million barrels per day.
Asian market recap
The detention of the Chief Financial Officer of Huawei in Canada shaken the shares of technology companies in Asia, including Huawei’s partners.
Samsung shares fell by 2.29%, while Sunny Optical wiped 5.47% of its value. The shares of AAC Technologies and Chinasoft International fell by 5.59% and 11.71%, respectively.
Japan’s SoftBank, which last year demonstrated together with Huawei the potential of the next generation of the high-speed mobile Internet, has also seriously affected with shares dropping by 4.93%.
The shares of Tokyo Electron and Advantest dropped by 4.54% and 5.30% respectively, while TDK Corp wiped out 6.64%.
Similar is the situation with the main Taiwanese technology names – Catcher Technology and Taiwan Semiconductors, which recorded a decrease in the value of 9.89% and 2.52%, respectively.
On this backdrop, the Japanese blue-chip index Nikkei 225 declined by 417 points, or 1.91%, to 21,501.62 points.
On Chinese markets, the continental index Shanghai Composite dropped by 44.62 points, ending the session at 2,605.18 points.
Hong Kong’s Hang Seng reported a decline of 663.30 points, or 2.47%, to 26,156.38 points.
In Australia, the local benchmark S&P ASX 200 fell by 0.19% to a level of 5,657.70 points, continuing the negative trend from the previous session caused by the quarterly GDP data failed to meet analysts expectations.
The South Korean Kospi Index fell by 1.55%, or 32.62 points, to 2,068.69 points.
European markets mid-session recap
European markets were down by more than 2% as a sell-off that started in Asia gathered pace. Major indexes sank to record lows.
Share sell-off dragged the British index FTSE 100 to its lowest level since December 2016. At 11:00 GMT, the index fell to 6,745.33 points, which represents a decrease of 2.55%, or 176.51 points, for the session. Among the biggest fallers in London were mining firms Antofagasta, down 5.8%, and Glencore, which fell 4.9%.
German stocks tumbled on Thursday to extend losses from the previous session, as the arrest of the chief financial officer of Huawei Technologies sparked worries that trade tensions between the US and China will not be resolved anytime soon. The benchmark DAX 30 dropped by 276.29 points or 2.47% to 10,923.95 points in mid-session, reaching the lowest values in two years. The pharmaceutical giant Bayer lost 2.5% despite the company setting itself ambitious growth and margin targets through 2022.
The French stocks fell sharply on Thursday with CAC 40 wiping out 113.58 points, or 2.30%, from its value at 11:00 GMT. The index fell to 4.,830.78, which is the lowest level since February 2017. Capgemini slumped by 6% after its board decided to co-opt Laura Desmond as a new director. The aerospace equipment maker Latecoere plunged as much as 23% after cutting its 2019 earnings outlook, while the drugmaker Sanofi dropped by 1.7% on reports that it plans to cut 670 jobs in France by end 2020. The residential property company Vonovia rose over 1% after reporting a rise in nine-month profit and confirming its forecast for the year as a whole.
Wall Street pre-session recap
The arrest of Huawei Chief Financial Officer Meng Wanzhou in Canada jolted market sentiment in the US as well. The futures on Wall Street indexes are sinking deep in red and expected to open the session with strong declines.
The futures on blue-chip index Dow Jones Industrial Average are down by 459 points at 06:00 AM ET, indicating a negative start for the benchmark of 455.07 points. The S&P 500 and Nasdaq are also expecting to sank deep in red with -47.56 points and -162.71 points, respectively.
The markets were closed yesterday for a mourning day in memory of 41st country president George W. Bush.