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06 December 2018
 |
| financial markets (The Total Investment & Insurance Solutions) |
World financial markets took another plunge Thursday on concerns that
the arrest of a senior official at Chinese telecoms equipment maker Huawei
could hinder progress in China-U.S. trade talks.
The price of oil also fell even though OPEC
was expected to agree on a production cut to support the energy market.
KEEPING SCORE: The DAX in Germany fell 2.4
percent to 10,933 and France's CAC 40 dropped 2.2 percent to 4,836. The FTSE
100 in Britain lost 2.2 percent to 6,767. U.S. futures also augured a downbeat
start for Wall Street after markets were closed Wednesday to mourn the death of
former President George H.W. Bush. The contract for the Dow lost 1.6 percent
and that for the S&P 500 declined 1.5 percent.
ASIA'S DAY: Hong Kong's Hang Seng index
tumbled 2.5 percent to 26,156.38 and Japan's benchmark Nikkei 225 fell 1.9
percent to 21,501.62. Australia's S&P/ASX 200 lost 0.2 percent to 5,657.70,
while South Korea's Kospi sank 1.6 percent to 2,068.69. The Shanghai Composite
index dropped 1.7 percent to 2,605.18. Shares also fell in Taiwan and all other
regional markets.
HUAWEI: The news of Huawei CFO Meng Wanzhou's
arrest sent shares sharply lower. Shares had rallied Monday following President
Donald Trump's agreement with his Chinese counterpart Xi Jinping over the
weekend to hold off on further retaliatory moves in a festering trade war. But
they've since fallen back amid confusion over what the two sides agreed to and
whether the deal will enable Beijing and Washington to resolve longstanding,
profound differences over technology policy and other issues. China demanded
Meng's immediate release.
ANALYST'S TAKE: "We are closely watching
the developments in Asia after reports that Canada has arrested the Huawei CFO
facing U.S. extradition for allegedly violating Iran sanctions. This headline
is quite significant as the U.S. government is attempting to persuade allies to
stop using Huawei equipment due to security fears, and this headline could
weigh negatively on tech stocks," said Stephen Innes, head of trading at
Oanda in Singapore.
OPEC'S MOVE: OPEC countries gathered Thursday
to find a way to support the falling price of oil, with analysts predicting the
cartel and some key allies, like Russia, would agree to cut production by at
least 1 million barrels per day. OPEC heavyweight Saudi Arabia indicated it was
in favor of such a cut. The expectation did not keep the price of oil from
falling, however, as investors focused on the potential economic disruption
from any escalation in the U.S.-China trade war. Benchmark U.S. crude lost
$1.45 to $51.44 a barrel in electronic trading on the New York Mercantile
Exchange. Brent crude, used to price international oils, dropped $1.48 to
$60.08 per barrel.
CURRENCY: The dollar slipped to 112.80 yen
from 113.20 yen. The euro was flat at $1.1345.The Total Investment & Insurance Solutions
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