Fiona Cincotta, senior market analyst at City Index, says the shock arrest of Huawei’s CFO was a big factor behind today’s market meltdown.
For China the Huawei arrest will add insult to injury as the arrested executive, Meng Wangzhou, is not only the company’s CFO but also the Huawei founder’s daughter and the prospective company successor and concerns are growing that the country could retaliate with arrests of US executives.
Although Meng Wangzhou was detained in Canada on suspicions of breaching sanctions against Iran the arrest highlights a different set of tensions between the US and China – the issue of cybersecurity. The US has long suspected Huawei of foul play in cybersecurity and has restricted the sale of its 5G equipment in the US for fears that it might be used for dubious purposes.
Today’s sell-off has driven the FTSE 100 index down to its lowest close in over two years.