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Asian Markets Mixed; Chinese Stocks Gain as U.S. Eases Restrictions on Huawei

2019-05-21 12:03    Investing

Asian Markets Mixed; Chinese Stocks Gain as U.S. Eases Restrictions on Huawei Stock News

Asian markets were mixed in morning trade on Tuesday. Chinese stocks rebounded as the U.S. government's decision to temporarily ease some trade restrictions imposed on Huawei eased trade tension between the U.S. and China.

The Shanghai Composite and the Shenzhen Component gained 0.9% and 0.6% by 10:30 PM ET (02:30 GMT). Hong Kong’s Hang Seng Index was unchanged at 27,781.00.

Japan’s Nikkei 225 slipped 0.3%. South Korea’s KOSPI was up 0.6% as index heavyweight Samsung Electronics Co Ltd (KS:005930) jumped more than 3% following Monday’s news of Google (NASDAQ:GOOGL) suspending business activity with China’s top telecom company Huawei Technologies.

Earlier in the day, Bloomberg reported that companies including Intel (NASDAQ:INTC), Qualcomm (NASDAQ:QCOM) and Broadcom (NASDAQ:AVGO) also decided not to supply Huawei until further notice.

Overnight, the U.S. Commerce Department announced it will temporarily allow Huawei to purchase U.S.-made goods.

The new authorization, which will be in effect for 90 days, is intended to give telecommunications providers that rely on Huawei equipment time to make other arrangements and minimize disruption for the telecom company's customers around the world., U.S. Secretary of Commerce Wilbur Ross said in a statement.

Zhang Ming, Beijing’s ambassador to the EU, told Bloomberg in an interview that China will retaliate against the sanctions on Huawei.

“This is wrong behavior, so there will be a necessary response,” said Zhang, who described the action as politically motivated. “The U.S. government is trying to bring down Huawei through administrative means.”

Reports that Google has now suspended some business with Huawei sent U.S. technology stocks lower overnight.

All Huawei-made phones will immediately lose access to updates to the Android operating system, while newer Huawei smartphones coming out in the future will lose access to the Google Play Store and Gmail app, according to Reuters.

The Wall Street Journal reported, however, that a person familiar with the matter said Google would be halting its plans to cut Huawei’s access. The article did not give any further details.

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