Huawei Case Weighs Down Hong Kong Market

Hong Kong stocks fell Tuesday as the US decision to charge China's Huawei cast a shadow over upcoming trade talks, while mainland markets were also hit with telecoms firms taking a blow.

The Hang Seng Index sank 0.2 percent, to 27,531.

On the mainland, the Shanghai Composite Index slipped 0.1 percent, to 2,594, while the Shenzhen Composite Index was down 1.1 percent, to 1,300.

Tokyo shares closed marginally higher with the Nikkei 225 index edging up 0.1 percent, to end at 20,664.

Sydney fell 0.5 percent and Singapore gave up 0.3 percent.

Wellington, Taipei, Manila and Jakarta rose while Seoul closed with minor gains.

The main focus of attention of the markets now will be the two-day meeting between China and US officials aimed at resolving the long-running trade war that has been a drag on equities.

However, the negotiations will begin under a cloud after the US Justice Department announced criminal charges against Huawei and its chief financial officer Meng Wanzhou.

Neil Wilson, chief market analyst at Markets.com, said: "This will ratchet up the pressure on the US-China talks this week, but the tariff spat is about much more than a single company's dealings."

"We're in big, long-term geopolitical territory and at the moment China has more to lose than the US in that its economy is slowing and it cannot afford a long-term trade war."

The pound was slightly lower against the US dollar but continued to hold its ground ahead of a vote in parliament later on Tuesday on Prime Minister Theresa May's revised Brexit deal. (AFP)