Technology

Global markets make gains amid Huawei 90-day grace period

The founder of Huawei also expressed confidence that Washington's curbs on sales to the Chinese tech giant will have little impact on the company.

Most global stock markets rose after the US government issued a 90-day grace period on its order to bar US firms from selling to Chinese telecom giant Huawei.

The reprieve eases the immediate hit on US suppliers and has at least temporarily quelled investors’ anxiety over the curbs on sales to Huawei, which had been dragging down Wall Street.

The founder of Huawei also expressed confidence that Washington’s curbs on sales to the Chinese tech giant will have little impact on the company.

Ren Zhengfei said it is discussing “emergency relief” from Google for possible loss of services for its smartphone business. He said the company has “supply backups” if it loses access to American components.

Huawei logo
Huawei has been caught up in a trade war between the US and China (Steve Parsons/PA)

London’s FTSE 100 rose 0.7% to 7,359 points and Frankfurt’s DAX gained 0.9% to 12,150. France’s CAC 40 was more than 0.4% higher at 5,382.

On Wall Street, future contracts for the Standard & Poor’s 500 index gained 0.5% to 2,857. The same for the Dow Jones Industrial Average rose 0.4% to 25,804.

Anxiety over US-Chinese trade tension was reignited last week by Washington’s decision to require export licenses for technology sales to Huawei Technologies Ltd. American officials say the biggest global maker of network gear for phone carriers is a security risk, which Huawei denies.

That followed new tariff hikes announced by both sides in a broader battle over Beijing’s technology ambitions and trade surplus.

Both sides are “seemingly digging in for a battle of attrition”, said Mizuho Bank in a report. It said investors are trying to figure out the duration, the impact on profits and the “toxic atmosphere for American sales in China”.

In Asia, the Shanghai Composite Index gained 1.2% to 2,905.47 while Tokyo’s Nikkei 225 lost 0.1% to 21,272.45.

Hong Kong’s Hang Seng shed just 0.5% to 27,657.24 and Seoul’s Kospi advanced 0.3% to 2,061.25. Sydney’s S&P-ASX 200 added 0.4% to 6,500.10 and Taiwan also gained. New Zealand and Singapore retreated.

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