Stock market news: Europe and Asia crash as trade war fears continue

Chris
Hondros/Newsmakers/Getty

• Global stock market rout continues as geopolitical
  tensions heighten following arrest of Huawei CFO.
• Sabrina Meng Wanzhou, one of the Chinese tech giant’s
  most senior staff, was arrested for allegedly attempting to
  evade newly-implemented US sanctions.
• The news added to already existing market worries about
  the state of global trade, and pushed all major European and
  Asian share indexes sharply lower.
• Oil is also sliding ahead of a meeting between OPEC
  member states later on Thursday.
• 
  You can follow
  the latest market movements with Markets Insider.
  

Global stock markets continue to drop sharply on Thursday as the
geopolitical fears gripping investors this week persist.

Having started the week in a buoyant mood, investors have lost
all confidence in the long-term effectiveness of the agreement
struck between Presidents Trump and Xi at the G20, and have been
further shaken on Thursday by news that Huawei’s Chief
Financial Officer, Sabrina Meng Wanzhou,
was detained by Canadian authorities at the request of the US
government.

Wanzhou has been arrested for allegedly attempting to evade
newly-implemented US sanctions that kicked in at the start of
November.

At a time when markets are ultra-sensitive to any
trade-related news, risk assets have taken a beating on the
development.

“The latest bout of anxiety stems from the arrest and planned
extradition from Canada to the US of the CFO (and founder’s
daughter) of Chinese telecom giant Huawei, on allegations of
breaching Iran sanctions and suspicions of cyber-espionage,” Mike
van Dulken, senior markets analyst at Accendo Markets wrote on
Thursday morning.

“Having swung between optimism and scepticism about
a US-China trade war truce through February, and we
note Chinese diplomats making positive noise overnight (‘friendly
and candid atmosphere’ between Xi and Trump), traders are
understandably cautious,” he added.

Read more:
A major pillar of China’s economy has passed the ‘tipping point’
and could slow further, analyst says

Wanzhou’s arrest initially spooked Asian investors, with
all mainland Chinese and Hong Kong stocks dropping sharply during
trading. Hong Kong’s Hang Seng was the biggest casualty, losing
around 2.5% of its value over the course of the day. 

Fears have spread into Europe, and in the first hour of
trading all major European indexes are down more than 1%. Here’s
the scoreboard:

• Shanghai Composite closed 1.7% lower at 2,605
  points.
• Hong Kong’s Hang Seng down 2.6% to 26,135
  points.
• Japan’s Nikkei 225 down 1.9% to 21,501.
• Germany’s DAX lower by 1.8% to 10,995.
• Britain’s FTSE 100 down 1.6% to 6,814, now lower than
  it was at the start of 2000.

Markets are so spooked right now that
trading on US futures had to be stopped several times
overnight after high volatility led to huge price swings.

CME Group had to repeatedly halt trading in US stock
futures for brief periods this morning because of violent price
moves, in an unusual intervention that has stunned traders. US
markets had been closed on Wednesday in a mark of respect for the
funeral of former US President George HW Bush, so missed out on
the negative price action on the day.

Signs are, however, that US stocks will start where they
left off at the close on Tuesday, dropping sharply at the
open.

Futures trading, which has now resumed, points to all three
major US indexes opening lower by around 1%. Here’s the futures
scoreboard as of around 8.40 a.m. GMT (3.40 a.m. ET):

• S&P 500 futures — down 1%
• Dow Jones futures — down 1.2% 
• Nasdaq futures — down 1.3%

Elsewhere in markets,
oil is jittery ahead of a final meeting of the year between
OPEC member states in Vienna later in the day.

Member states are expected to agree a cut in oil production
levels by around 1.3 to 1.5 million barrels per day, but traders
seem unconvinced so far, with both Brent and WTI sliding on
Thursday morning.

At the time of writing Brent crude, the international benchmark,
is down 0.9% to $60.99 per barrel, while US-centric WTI crude is
off 0.81% to $52.46.