Asian stocks trade lower; Nissan shares plunge on chairman’s arrest

Shares of Japanese automaker Nissan were down 5.51 percent in afternoon trade on Tuesday after its chairman, Carlos Ghosn, wasarrested a day earlier over allegations of financial misconduct.

The auto giant said in a statement on Monday that “over many years” Ghosn and board director Greg Kelly had been under-reporting compensation amounts to the Tokyo Stock Exchange securities report.

Nissan added that, with regard to Ghosn, “numerous other significant acts of misconduct have been uncovered, such as personal use of company assets.” The company said Ghosn had also made inappropriate investments.

In a press conference Monday, Nissan Chief Executive Hiroto Saikawa, said both men had been arrested and this Thursday he would propose to the Nissan Board of Directors to remove them from their roles.

Ghosn is also chairman and CEO of the strategic alliance between French automaker Renault, Nissan and Mitsubishi Motors. Mitsubishi Motors shares were down 6.58 percent.

The broader Japanese market also fell Tuesday afternoon, with the benchmark Nikkei 225 down 1.26 percent and the Topix index lower by 0.9 percent. In South Korea, the Kospi slipped 1.15 percent.

The mainland Chinese markets were also negative territory by the end of the morning session. The Shanghai composite fell 1.63 percent while the Shenzhen composite shed 1.765 percent. Hong Kong’s Hang Seng index also fell 1.83 percent.

Australia’s ASX 200 was down 0.47 percent in afternoon trade, with almost all sectors in negative territory.

Dow falls almost 400 points overnight

In overnight market action on Wall Street, the Dow Jones Industrial Average fell 395.78 points to close at 25,017.44 while the S&P 500 dropped 1.7 percent to 2,690.73. The Nasdaq Composite saw the largest percentage loss among the three major indexes, falling 3 percent to close at 7,028.48

The popular “FAANG” trade made up of Facebook, Amazon, Apple, Netflix and Alphabet is now in a bear market with each member down more than 20 percent from their one-year highs.

Tech shares also fell after The Financial Times reported Chinese authorities have alleged “massive evidence” of antitrust violations by Samsung, SK Hynix and Micron Technology.

The report also said China would deepen its investigation into the three companies, which are the largest memory-chip manufacturers in the world.

Shares of Samsung Electronics fell 2.06 percent in afternoon trade while SK Hynix shares were down 3.44 percent.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.231 after seeing highs above 96.5 in the previous session.

The Japanese yen, widely viewed as a safe haven currency, was at 112.53 against the dollar after seeing lows around the 112.8 handle yesterday. The Australian dollar traded at $0.7274 after seeing an earlier high of $0.7300.

Source: Reuters