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Arrest of Huawei executive sparks tumble on Wall St amid fears of worsening US-China tensions
BY BUSINESS REPORTER
DAVID CHAU, WIRESUPDATED ABOUT 2 HOURS AGO
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The arrest of Huawei's CFO is almost certain to inflame US-China trade tensions.
REUTERS: YVES HERMAN
Global markets plummeted after a fresh twist in the US-China trade war, although Wall Street staged a late rebound.
Markets at 8:05am (AEDT):
- ASX SPI futures flat at 5,656, ASX 200 (Thursday's close) -0.2pc at 5,658
- AUD: 72.36 US cents, 56.58 British pence, 63.56 Euro cents, 81.54 Japanese yen, $NZ1.05
- US: Dow Jones -0.3pc at 24,948, S&P 500 -0.2pc at 2,696, Nasdaq +0.4pc at 7,188
- Europe: FTSE 100 -3.2pc at 6,704, DAX -3.5pc at 10,811, CAC -3.3pc at 4,780, Euro Stoxx 50 -3.7pc at 3,034
- Commodities: Brent crude -2.2pc at $US60.21/barrel, spot gold flat at $US1,237.81/ounce, iron ore -1.1pc at $US66.59/tonne
Canadian authorities arrested a high-profile executive from Chinese technology giant Huawei, a move almost certain to inflame tensions between Washington and Beijing.
That executive was Huawei's chief financial officer and deputy chair Meng Wanzhou — who is also the daughter of the company's founder.
Ms Meng faces extradition to the United States amid reports she violated American sanctions against Iran.
"Markets are extremely sensitive to any news regarding trade," said Massud Ghaussy, Nasdaq IR Intelligence's senior analyst.
"The potential slowdown in global growth is also something the markets are pricing in."
From the market's perspective, this development raises further doubts about whether the world's two largest economies can strike a trade deal before their truce ends on March 1.
Meanwhile, the Australian dollar fell sharply to 72.25 US cents, 56.54 British pence and 63.52 Euro cents at 7:10am (AEDT).
Foreign markets tumble
European markets were hit hardest, particularly London's FTSE (-3.2pc), Frankfurt's DAX (-3.5pc) and Paris' CAC (-3.3pc) indices.
PHOTO Huawei global chief financial officer Meng Wanzhou
SUPPLIED: HUAWEI.COM
The Euro Stoxx 50 index fell 3.7 per cent to its lowest level in two years.
Wall Street, on the other hand, experienced a steep tumble before managing to claw back most of its losses in the final hour of trade.
US markets rebounded after the Wall Street Journal reported the Federal Reserve might slow down the pace of interest rate hikes next year.
The Fed is still expected to lift rates this month, but is also considering whether to adopt a "wait-and-see mentality" throughout 2019.
The industrial-skewed Dow Jones finished 79 points lower, or down 0.3 per cent, to 24,948.
At its lowest point of the session, the Dow had plummeted by almost 800 points.
The benchmark S&P 500, similarly, rebounded from its heavy fall to end just 0.2 per cent lower at 2,696.
Meanwhile, the tech-heavy Nasdaq managed to break into positive territory in the final half hour, adding 0.4 per cent to 7,188.
Brent crude oil prices also took a dive, losing 2.1 per cent to $US60.29 per barrel — after initially dropping more than 3 per cent.
That was after a meeting in Viennabetween the world's biggest oil producers, including Saudi Arabia, ended with no decision to cut production levels — contrary to market expectations.
POSTED ABOUT 3 HOURS AGO
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Huawei's chief financial officer arrested in Canada, facing extradition to US
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