Tokyo shares fall as China-US tensions rekindled
December 6, 2018 | 12:11 PM
by AFP
Photo used for illustrative purpose only. Photo: Reuters/File

Japan: Tokyo stocks plunged Thursday on renewed worries about fraught China-US ties following the arrest of a top executive of Chinese telecoms firm Huawei in Canada on an American request.

The benchmark Nikkei 225 index lost 1.91 per cent, or 417.71 points, to 21,501.62, while the broader Topix index fell 1.82 per cent, or 29.89 points, to 1,610.60.

Shares opened in negative territory and steadily lost further ground as investors feared that the arrest of Huawei chief financial officer Meng Wanzhou could further hit relations between the world's top economies.

Meng, the daughter of company founder Ren Zhengfei, was arrested in Canada and faces extradition to the United States.

The news came only days after US and Chinese presidents Donald Trump and Xi Jinping agreed to a tariffs ceasefire, which had eased fears about the impact of a trade war on the global economy.

Meng's detention battered investor confidence, sending down stock markets in Asia, particularly Shanghai and Hong Kong, with tech firms among the worst hit.

"The blue sky that appeared right after the Trump-Xi meeting quickly disappeared. And then, the arrest of Huawei CFO, the daughter of the founder, came, shaking investor sentiment," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

"The arrest came at a bad time. We don't know whether it's intentional but it happened when the US and China are embroiled in the trade dispute," he said.

Tokyo shares were also weighed by a weaker dollar against the yen, Okasan Online Securities said.

The dollar fetched 112.81 yen in Asia, from 113.47 yen in London.

"The market tested its downside, although toward the closing bell, the speed of the fall seemed to have slowed," Okasan said in a commentary.

The reaction of US shares later in the day should decide the tone of the global market going forward, it said.

In Tokyo, game giant Nintendo plunged 4.09 per cent to 31,920 yen, Sony dropped 2.68 per cent to 5,776 yen, and Panasonic gave up 2.69 per cent at 1,121.5 yen.

Takeda Pharmaceutical sank 3.21 per cent to 4,104 yen after its shareholders agreed to a $60-billion takeover of Irish pharmaceuticals firm Shire.

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