The US stock exchange has followed Asian and European markets sharply lower in the wake of the arrest, in Canada, of Meng Wanzhou, the CFO of Chinese telecoms giant Huawei in Canada, possibly at USA’s request on charges relating to breaking its sanctions on Iran. It is anticipated that Ms Wanzhou, the company founder’s daughter may be extradited to the USA. The move has sparked fears that a putative truce in the US-China trade war could be harmed and acts as a backdrop to other market concerns. Some nations have banned the sale of Huawei products on the grounds of national security, fearing that data held on the devices could be compromised for nefarious purposes.
Shares on European markets dropped to a two-year low on the news and Asian markets also fell sharply. The Nikkei index fell by 1.9% and Hong Kong’s Hang Seng index dipped by 2.5% over the course of the day’s trading. The Dax and CAC both lost 2.6% of their values and the FTSE-100 fell 2.5% to levels last seen in December 2016 (markets still open at the time of writing).
The US markets have opened sharply following falls on Tuesday, the markets being closed yesterday as a mark of respect following the death of President Bush Sr. The Dow, Nasdaq and S&P all fell by 2% in early session trading (markets open at the time of writing).
The mining sector, oil companies, car manufacture and tech stocks have been hard hit by the sell-off in shares.
The other factors that are responsible for the current Bearish mood amongst investors include the US trade war with China (and others), the falling oil price (although it looks as if OPEC may cut production in a bid to shore it up), potential interest rate rises and the prospects for global economic growth.