U.S. stock futures fall, Asia follows after Canada arrests Huawei CFO

Business

TOKYO (Reuters) – U.S. stock futures tumbled on Thursday and Asian markets followed after Canadian authorities arrested a top executive of Chinese tech giant Huawei Technologies, fanning fears of further tensions between China and the United States.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., December 4, 2018. REUTERS/Brendan McDermid/File Photo

S&P500 e-mini futures ESc1 fell almost 2 percent at one point in thin Asian morning trade and were last were down 0.7 percent.

The Canadian Justice Department said Meng Wanzhou, deputy chair of Huawei, was arrested early this month and that she was sought for extradition by the United States.

The arrest heightened the sense of a major collision between the world’s two largest economic powers not just over tariffs but also over technological hegemony.

It also came as an inversion in the U.S. yield curve has stoked global investor worries of a possible U.S. recession.

Japan’s Nikkei .N225 slid 0.8 percent, with benchmark indexes in South Korea .KS11 and Australia down 0.6 percent and 0.2 percent, respectively.

Currencies were steadier, with major currencies little changed so far.

The euro traded flat at $1.1347 EUR= while the dollar dipped 0.1 percent against the yen to 113.01 JPY=. The yuan CNH= is also unmoved at 6.8660 in the offshore trade.

U.S. Treasuries futures TYv1 were also almost flat.

The benchmark Treasury 10-year yield US10YT=RR fell to its lowest point since mid-September on Tuesday while the five-year yield dropped below the two-year yield, causing a so-called inversion in the yield curve.

Because an inverted curve has often tended to precede a recession, investors were spooked by that.

U.S. markets were closed on Wednesday to mark the death of former President George H.W. Bush.

Editing by Kim Coghill

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