Global Markets Gain on Huawei Grace Period
BEIJING (AP) — Most global stock markets rose Tuesday after the U.S. government issued a 90-day grace period on its order to bar U.S. firms from selling to Chinese telecom gear maker Huawei.
The reprieve eases the immediate hit on U.S. suppliers and has at least temporarily quelled investors' anxiety over the curbs on sales to Huawei, which had been dragging down Wall Street.
Also Tuesday, the founder of Huawei expressed confidence that Washington's curbs on sales to the Chinese tech giant will have little impact on the company. He said it is discussing "emergency relief" from Google for possible loss of services for its smartphone business. Ren Zhengfei said the company has "supply backups" if it loses access to American components.
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 U.S.-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.
ENERGY: Benchmark U.S. crude gained 30 cents to $63.40 in electronic trading on the new York Mercantile Exchange. Brent crude, used to price international oils, also gained 40 cents to $72.37 per barrel in London.
CURRENCY: The dollar gained to 110.47 yen from Monday's 110.06 yen. The euro declined to $1.1160 from $1.1169.
By AP reporter Joe McDonald