Detention of Huawei’s Sabrina Meng Wanzhou casts shadow on China, Hong Kong stocks
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Stocks listed in mainland China and Hong Kong on Friday barely recovered from a sell-off sparked a day earlier by the detention in Canada of the chief financial officer of Huawei Technologies, as traders reassessed the outlook for US-China trade negotiations in the aftermath of the episode.
On the mainland, the Shanghai Composite Index swung between gains and losses for most of the trading hours on Friday before closing 0.03 per cent higher at 2,605.89. In Hong Kong, the Hang Seng Index slipped by 0.4 per cent to 26,063.76.
On Thursday, both gauges slumped by at least 1.7 per cent after Canada said it had detained Huawei CFO Sabrina Meng Wanzhou, daughter of the founder of the Chinese telecom juggernaut, at the request of the US government.
Trading was light on Friday, as traders scrambled to parse which way the 90-day trade talks between the United States and China – two of the world’s largest economies – would head. Trading values on the Shanghai Exchange fell beneath 100 billion yuan (US$14.5 billion) for the first time in three months to 97.7 billion yuan.
“The timing is very sensitive. Both countries’ leaders were at dinner when she was put in custody, which puts uncertainty on both countries’ trade war negotiations,” said Louis Tse Ming-kwong, managing director of Hong Kong brokerage VC Asset Management, referring to Donald Trump and Xi Jinping.
“On top of that, there is the reversal of the bond yield in the US. All of this is putting pressure on global markets and causing a sell-off.”