HONG KONG, Jan 17 — Asian markets were mixed today as renewed concerns about China-US tensions overshadowed a positive lead from Wall Street following a better-than-expected round of corporate earnings.

The pound stood its ground against the dollar after Prime Minister Theresa May survived a no-confidence vote as she prepares to draw up new proposals to leave the European Union that are palatable to a majority of MPs.

After a tumultuous December, global equities have enjoyed a broadly strong start to the year, largely thanks to optimism China and the US will resolve their trade row.

But confidence took a knock yesterday from a report that said US officials were carrying out a criminal probe into Chinese tech giant Huawei and could soon indict the firm over allegations of theft of trade secrets from its American business partners.

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Lawmakers have also introduced a bill to ban the export of American parts and components to Chinese telecom companies that are in violation of US export control or sanctions laws — with Huawei and fellow Chinese firm ZTE the likely targets.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” said Republican Senator Tom Cotton, one of the bill’s sponsors.

The developments follow the arrest last year in Canada of Huawei’s chief financial officer Meng Wanzhou, who is the daughter of the company’s founder and faces extradition to the US on Iran sanctions-linked fraud charges.

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It also muddies the waters in trade talks between Beijing and Washington, which looked to be on a positive course after officials held three days of talks earlier this month, with both sides seemingly upbeat.

Further talks have been pencilled in for Washington on January 30-31, which will be attended by China’s top negotiator Liu He.

Cost of US shutdown

Hong Kong skidded 0.5 per cent and Shanghai closed down 0.4 per cent, while Tokyo slipped 0.2 per cent by the end. Singapore eased 0.4 per cent.

But Sydney edged up 0.3 per cent and Seoul put on 0.1 per cent, while Taipei, Wellington, Manila and Jakarta were also in positive territory.

In early trade, London fell 0.4 per cent, Paris shed 0.7 per cent and Frankfurt was off 0.6 per cent.

On Wall Street, all three main indexes closed with gains after earnings reports from Bank of America and Goldman Sachs that overshot forecasts, while executives said they were confident the US economy was in rude health.

The Federal Reserve’s closely followed “Beige Book” report pointed out that political and trade uncertainty was weighing on business confidence though growth was continuing at a modest pace in most of the country.

There are increasing worries about the impact of the US government shutdown as it moves towards a fifth week, with Oxford Economics estimating it is slashing growth by US$700 million a week.

On currency markets, the pound dipped against the dollar but held most gains with dealers optimistic that Britain will not leave the EU without a deal in place, despite May’s exit plan being thrown out by MPs Tuesday.

Yesterday, she survived a no-confidence vote and is now planning her next move, with speculation swirling that the March 29 date for Britain leaving the bloc will be delayed or another referendum will be called.

“The general feeling in the markets remains that somehow MPs will be able to come together to be able to head off the prospect of the current default position of a no-deal Brexit,” said Michael Hewson, chief market analyst at CMC Markets UK.

“However that theory is still likely to be severely tested in the coming days and weeks.”

Key figures around 0820 GMT

Tokyo – Nikkei 225: DOWN 0.2 per cent at 20,402.27 (close)

Hong Kong – Hang Seng: DOWN 0.5 per cent at 26,755.63 (close)

Shanghai – Composite: DOWN 0.4 per cent at 2,559.64 (close)

London – FTSE 100: DOWN 0.4 per cent at 6,832.74

Pound/dollar: DOWN at US$1.2860 from US$1.2877 at 2140 GMT

Euro/dollar: DOWN at US$1.1385 from US$1.1395

Dollar/yen: DOWN at 108.78 yen from 109.05

Oil – West Texas Intermediate: DOWN 38 cents at US$51.93 per barrel

Oil – Brent Crude: DOWN 34 cents at US$60.98 per barrel

New York – DOW: UP 0.6 per cent at 24,207.16 (close)

— AFP