On Thursday the trend of the global stock market plummeting down continued because of the persisting geopolitical fears that have been gripping the investors this week.
The week took off in a buoyant mood with the news of the truce between the presidents of United States and China at the G20 summit that was held at Argentina.
But later the investors lost the confidence of the long-term effectiveness of the agreement and were shaken further on Thursday by the news that the Chief Financial Officer of Huawei, Sabrina Meng Wanzhou was detained by the authorities of Canada on the request of the government of the United States.
The arrest has taken place because Wanzhou was alleged to be attempting to evade the newly implemented sanctions of the United States which has come into force in the beginning of November.
On the development, the risks assets have taken a beating because at this time the market is ultra sensitive to any trade related news.
On the Thursday morning, the senior market analyst at the Accendo Markets, Mike van Dulken, stated that the last bout of anxiety came from the arrest as well as planned extradition of the CFO of Huawei which is a Chinese telecom, from Canada to United States.
He further stated that this was on the allegation of the CFO breaching the sanctions imposed on Iran as well as suspicions of cyber-espionage.
He also stated that the investors have been swinging between optimism and scepticism related to the truce at the trade war between the United States and China through February to December and now when the Chinese diplomats are making positive noises, the traders are cautious and that is understandable.
Source: BusinessInsider, USAOnlineJournal