Global Markets Continue Steep Declines
Global stock markets continued a selloff that began on Tuesday as traders faced new fears about the continuing trade war between the U.S. and China after reports that Meng Wanzhou, CFO of Huawei, a Chinese telecommunications giant, was arrested in Canada on suspicion of violating U.S. sanctions. U.S. authorities have been investigating Huawei, one of the world’s largest manufacturers of telecommunications network equipment, for at least two years, for allegedly providing products to Iran and for breaching U.S. export and sanction laws. Wanzhou is expected to be extradited to the United States.
Analysts are concerned that the arrest will fan the flames of discontent between China and the U.S. despite the trade war ceasefire confirmed last weekend. China has already expressed its discontent at the way U.S. President Donald Trump related the ceasefire to the media. However, according to a report by CNBC, eighty percent of movements on U.S. stock markets are algorithmic and are not prompted specifically by investor concerns, even when global relations are rocky.
Asian markets were broadly lower with Hong Kong’s Hang Seng Index facing the steepest losses, trading down 2.71 percent as of 1:40 p.m. HK/SIN. Japan’s Nikkei 225 was close behind, falling 2.44 percent by the early afternoon. The Shenzhen Composite was down 2.07 percent which the Shanghai Composite was down 1.63 percent. Even Australia’s ASX 200 which is often impervious to declines because of its geographic distance, was down 0.19 percent. Stock futures on Wall Street were also lower on Thursday after U.S. markets were closed on Wednesday for a day of mourning after the death of former President George H.W. Bush.
Traders are now eyeing U.S. jobs data which will be released tomorrow as a way to gauge the country’s economic stability and for hints as to whether the economy may be losing steam in the face of global trade tensions.