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Nov. 23, 2018, 6:52 a.m. EST

China stocks fall, led by tech names as trade worries fester

Weak oil prices also pressure Asian indexes

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By Barbara Kollmeyer, MarketWatch


Reuters
Reports that U.S. trying to sway its allies from using Huawei products

Chinese stocks fell Friday, with investors jittery ahead of next week’s U.S./China trade talks, and with technology names under pressure over a report that the U.S. has been pressuring foreign allies to avoid doing business with China’s Huawei Technologies Co.

Not helping sentiment, oil prices  fell and U.S. stock futures  indicated a lower open for Friday’s holiday-shortened session on Wall Street, which was closed for Thanksgiving Day on Thursday. Japanese markets were closed for a public holiday Friday.

The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.26% fell 2.5%, while the smaller Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 -0.62% tumbled 3.6%. A report in The Wall Street Journal that said the U.S. has been trying to persuade its foreign allies to avoid using China’s Huawei Technologies Co.’s telecoms equipment, citing cybersecurity concerns.

Telecom and tech stocks bore the brunt of losses, with Foxconn Industrial internet Co. /zigman2/quotes/207846638/delayed CN:601138 -0.75%  down nearly 5%, Dr. Peng Telecom & Media Group Co. /zigman2/quotes/208239965/delayed CN:600804 -0.76% off over 6.8% and ZTE Corp.  /zigman2/quotes/209674390/delayed CN:000063 -1.10%  down 3.3%.

News of pressure over Huawei comes just ahead of trade talks between U.S. President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Argentina next week.

“Realistically the best that we are going to see from the G-20 is an agreement by the U.S. and China to keep talking. The trade tension story has moved past the point of a quick resolution. We expect this risk to continue to be a theme in 2019 which will continue to weigh on appetite for riskier assets,” said Jasper Lawler, head of research at London Capital Group, in a note to clients.

U.S. officials warned Americans not to buy Huawei devices in February, saying they could be used to spy on users. Earlier this year, lawmakers introduced the Defending U.S. Government Communications Act, which would ban government agencies from using equipment from ZTE and Huawei.

Losses were more measured in Hong Kong, where the Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.69%  eased 0.4%. Elsewhere, the South Korea Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.33% fell 0.6%, while Taiwan stocks slipped 0.4%. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.68% rose 0.4%.

/zigman2/quotes/210598127/delayed
CN : China: Shanghai
3,386.46
+8.90 +0.26%
Volume: 41.53B
Aug. 6, 2020 3:01p
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/zigman2/quotes/210598015/delayed
CN : Shenhzen Stock Exchange
2,304.52
-14.40 -0.62%
Volume: 53.40B
Aug. 6, 2020 3:00p
loading...
/zigman2/quotes/207846638/delayed
CN : China: Shanghai
¥ 14.50
-0.11 -0.75%
Volume: 45.92M
Aug. 6, 2020 3:00p
P/E Ratio
16.23
Dividend Yield
1.38%
Market Cap
¥288.00 billion
Rev. per Employee
¥1.32M
loading...
/zigman2/quotes/208239965/delayed
CN : China: Shanghai
¥ 9.14
-0.07 -0.76%
Volume: 49.43M
Aug. 6, 2020 3:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
¥13.19 billion
Rev. per Employee
¥249,823
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/zigman2/quotes/209674390/delayed
CN : China: Shenzhen
¥ 38.71
-0.43 -1.10%
Volume: 73.21M
Aug. 6, 2020 3:00p
P/E Ratio
32.50
Dividend Yield
0.52%
Market Cap
¥166.86 billion
Rev. per Employee
¥1.21M
loading...
/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
24,930.58
-171.96 -0.69%
Volume: 1.60M
Aug. 6, 2020 4:08p
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/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,342.61
+30.75 +1.33%
Volume: 797,147
Aug. 6, 2020 3:32p
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/zigman2/quotes/210598100/delayed
AU : S&P ASX
6,042.20
+40.90 +0.68%
Volume: 696,467
Aug. 6, 2020 5:11p
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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