After an initial rally fuelled by the China-US trade truce markets have resumed falling this week on concerns about a range of issues including global growth, oil prices and Brexit

Hong Kong (AFP) - Shares across Asia plunged Thursday, with Hong Kong and Shanghai-listed technology firms battered, after the arrest of a top executive at Chinese telecoms giant Huawei that has fuelled fears about the recent China-US trade deal.

As Donald Trump and Xi Jinping’s tariffs ceasefire last weekend – which sparked a one-day rally – fades to a distant memory, investors are back in selling mood as they fret over a range of issues including the state of the world economy, oil prices and Brexit.

The chance of trade peace between the US and China took a blow Thursday as it emerged Huawei chief financial officer Meng Wanzhou had been held in Canada and was facing extradition to the United States over alleged Iran sanctions breaches by the firm.

Meng is the daughter of company founder Ren Zhengfei, a former Chinese People’s Liberation Army engineer.

The company had been investigated by US intelligence, who deemed it a national security threat.

China expressed outrage, urging Canada and the US to “immediately correct the wrongdoing”.

However, later Thursday it appeared to soothe concerns about the trade pact by saying it would “immediately” implement the agreed measures on agricultural products, energy and autos.

Tech security is one of the key sticking points in the months-long trade row between the world’s top two economies.

The news sent shudders through Hong Kong and Shanghai markets, where tech firms were hammered.

Hong Kong-listed ZTE, which was subject to a US banning order over security fears this year before that was reduced to a massive fine, was almost six percent down.

Market heavyweight Tencent, AAC Technologies and Sunny Optical – a supplier to Huawei – each plunged more than five percent.

- Tech scythed -

And in Shanghai, Wingtech Technology was down by its daily limit of 10 percent, while Raisecom Technology and Fujian Raynen Technology both dived more than four percent.

Taipei-listed tech firms were also hurt, with Taiwan Semiconductor Manufacturing Company and Hon Hai Precision sharply lower.

There were also losses for other tech firms in the region, including Sony and Samsung. The tech sector was already under pressure from concerns about future growth and following a surge in recent years.

“This headline is quite significant as the US government is attempting to persuade allies to stop using Huawei equipment due to security fears,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

“Recall that over 100 Chinese companies traded limit down (last month) when news broke the US urged allies to blacklist Huawei?”

Broader markets – also hurt by worries the US economy is slowing – were well down.

Hong Kong shed 2.5 percent while Shanghai closed down 1.7 percent and Tokyo slipped 1.9 percent. Taipei was 2.3 percent off, while Manila and Jakarta also dived.

Sydney fell 0.2 percent, while Singapore sank 1.5 percent and Seoul gave up 1.6 percent.

In early European trade London dropped 0.8 percent, while Paris and Frankfurt dived more than one percent.

- Crude drops again -

“It’s really illustrative of the fact that the trade truce… doesn’t really do much to mend the underlying relationship between the US and China that is still deteriorating,” Eleanor Creagh, strategist at Saxo Capital Markets, told Bloomberg TV.

On foreign exchanges the flight to safe-haven assets sent high-yielding and emerging market currencies sharply lower, with the Australian dollar and South African rand one percent off, South Korea’s won 0.5 percent lower and the Indonesian rupiah 0.7 percent lower.

The greenback was well down against the yen, which is a go-to unit in times of turmoil.

The pound is struggling as Britain lurches towards a no-deal Brexit with Prime Minister Theresa May facing defeat in her attempts to push through parliament a controversial agreement with the EU.

Oil prices extended losses ahead of the weekend’s meeting of OPEC and non-OPEC production giants, with investors unsure about how much and for how long they plan to reduce output.

The commodity has come under selling pressure, having soared Monday and Tuesday, owing to uncertainty about the reduction plans while Trump has called on OPEC to lift output to keep prices low.

- Key figures around 0820 GMT -

Tokyo - Nikkei 225: DOWN 1.9 percent at 21,501.62 (close)

Hong Kong - Hang Seng: DOWN 2.5 percent at 26,156.38 (close)

Shanghai - Composite: DOWN 1.7 percent at 2,605.18 (close)

London - FTSE 100: DOWN 0.8 percent at 6,863.92

Euro/dollar: UP at $1.1333 from $1.1312 at 1700 GMT

Dollar/yen: DOWN at 113.00 yen from 113.47

Pound/dollar: DOWN at $1.2709 from $1.2745

Oil - West Texas Intermediate: DOWN 57 cents at $52.32 per barrel

Oil - Brent Crude: DOWN 52 cents at $61.04 per barrel

New York - Dow Jones: CLOSED for day of mourning