SINGAPORE — Asian markets were broadly lower Monday after China protested the arrest of a senior executive of Chinese electronics giant Huawei, who is suspected of trying to evade U.S. trade curbs on Iran.
KEEPING SCORE: Japan’s benchmark Nikkei 225 slid 2.3 per cent in early trading to 21,191.23, after revised data showed that its economy shrank by 2.5 per cent in the third quarter, more than expected. South Korea’s Kospi fell 1.2 per cent to 2,051.82. Hong Kong’s Hang Seng shed 1.6 per cent to 25,660.76 and the Shanghai Composite was 0.8 per cent lower at 2,585.94. Australia’s S&P/ASX 200 was down 2 per cent at 5,569.90. Shares fell in Taiwan, Singapore, Indonesia and the Philippines.
WALL STREET: Stocks tumbled on Friday on weaker-than-expected jobs growth and worries that the U.S.-China trade dispute will not be resolved within a 90-day timeframe. The S&P 500 index slipped 2.3 per cent to 2,633.08 and the Dow Jones Industrial Average gave up 2.2 per cent to 24,388.95. The Nasdaq composite tumbled 3 per cent to 6,969.25. The Russell 2000 index of small-company stocks dropped 2 per cent to 1,448.09.
HUAWEI ARREST: China has slammed the “extremely egregious” detention of Huawei chief financial officer Meng Wanzhou and demanded that the U.S. cancel an order for her arrest, the official Xinhua News Agency reported on Sunday. Meng, who is accused of attempting to evade U.S. sanctions on Iran, was arrested in Canada on Dec. 1. 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 based on its response, Xinhua said. The two countries recently agreed to hold off on 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.”
SLOWING CHINESE EXPORTS: On Saturday, Chinese customs data showed that exports rose 5.4 per cent to $227.4 billion in November over a year earlier. This is a broad decline from the 12.6 per cent surge in the previous month. Imports gained 3 per cent to $182.7 billion, as compared to a 20.3 per cent jump in October. The numbers paint a picture of a slowdown in the world’s second-largest economy, which could weigh on global growth.
ENERGY: Oil futures settled after the OPEC cartel and other major oil producers agreed 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 3 cents to $52.58 a barrel. It gained $1.12 to $52.61 a barrel in New York on Friday. Brent crude, used to price international oils, rose 45 cents to $62.12. The contract added $1.61 to $61.67 a barrel in London.
CURRENCIES: The dollar weakened to 112.32 yen from 112.72 yen late Friday. The euro rose to $1.1435 from $1.1379.
Annabelle Liang, The Associated Press