(Bloomberg) -- U.S. equity futures lurched lower as trading opened on Thursday in Asia, with S&P 500 Index contracts plunging as much as 1.9 percent on heavy volume.
Traders couldn't immediately pinpoint a trigger for a decline of that magnitude, though many cited the arrest of Huawei Technologies Co.'s Chief Financial Officer Wanzhou Meng and its implications for U.S.-China trade relations.
Some market watchers have pointed to a possible fat finger or that trading was distorted by the restart after Wednesday's closure for cash markets and shortened trading in the equity futures market. The selling pressure was so intense that it forced CME Group to pause trading, data indicated.
Futures pared some of the drop by 8:48 a.m. in Singapore, with S&P 500 contracts down 0.7 percent.
"We are closely watching the developments on this morning headlines after reports that Canada has arrested the Huawei CFO facing U.S. extradition for allegedly violating Iran sanctions," said Stephen Innes, head of trading for Asia-Pacific at Oanda Corp. in Singapore.
The plunge was the last thing that investors needed, already skittish after Tuesday's rout and an enforced lull on Wednesday for a day of mourning for former President George H.W. Bush. The S&P 500 plunged 3.2 percent on Tuesday, its biggest slide since the mid-October sell-off, while the Dow Jones Industrial Average sank almost 800 points as a litany of concerns wiped out the rally in risk assets.
"It does seem to be a very nervous market at the moment," said Nick Twidale, chief operating office at Rakuten Securities' Australian unit.
--With assistance from Matt Turner.
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