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Hong Kong Stocks extend losses on heightened trade tensions

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Headline shares of the Hong Kong market tumbled on Thursday, 06 December 2018, with the declines, in the wake of reports that had arrested the of China's and amid confusion over US-trade progress. News of the arrest heightened the sense a major collision was brewing between the world's two largest economic powers, not just over tariffs but also over technological hegemony. In afternoon trades, the dropped 690.23 points or 2.57% to 26,129.45. The Enterprises Index fell 290.98 points or 2.71% to 10,465.97.

has arrested Huawei's global in Vancouver, where she is facing extradition to the United States, Canada's said on Wednesday. The arrest is related to violations of U. S. sanctions. confirmed the arrest in a statement and said that it has been provided little information of the charges against Meng, adding that it was not aware of any wrongdoing by Ms. The arrest could drive a wedge between and the just days after and held a meeting in where they agreed to steps to resolve a brewing trade war. U. S. authorities have been probing Huawei, one of the world's largest makers of telecommunications network equipment, since at least 2016 for allegedly shipping U. S.-origin products to and other countries in violation of U.

S. export and sanctions laws.

The arrest reignited concerns over the chances for a longer-term US-China deal on trade. While investors initially greeted the trade ceasefire reached in with relief, the mood has quickly soured on skepticism that the two sides can reach a substantive deal.

Global equity markets have been shaken and the dollar fell this week after an inversion in a part of the yield curve triggered market concerns about economic growth. The spread between the two-year and five-year Treasury yields inverted this week and the two-year/10-year spread was at its flattest in more than a decade amid a sharp fall in long-term rates. A flatter curve is seen as an indicator of a slowing economy, with lower longer-dated yields suggesting that the markets see economic weakness ahead.

Investors are looking for progress on trade as well as clues to the future path of economic growth. U. S. said China is sending very strong signals following trade discussions in Argentina, as uncertainty remains over what commitments were made between the two nations. Over the weekend, President Trump agreed to suspend increases in tariffs on Chinese goods for 90 days, after a meeting with Chinese leader Xi at the summit in

The Federal Reserve's Beige Book economic report showed fading optimism over prospects for growth at U. S. firms even as a majority of districts continued to report a modest expansion in recent weeks.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 06 2018. 09:48 IST
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