Stock market turmoil wipes £56bn off FTSE 100, in worst day since Brexit vote – as it happened

London stock market has suffered its worst day in over two years, as the FTSE 100 falls by 217 points (3.15%) to 6704

Hold onto your tin hats!

The New York stock exchange has managed a late rebound. As shares clawed their way back, the Dow has closed just 79 points lower at 24,947 points.

Dow closes lower by less than 80 points after earlier plunging 785

If you’re just tuning in, here’s economics editor Larry Elliott on today’s market gyrations:

The value of the City’s leading companies has fallen by more than £56bn during waves of selling on stock markets in Asia, Europe and North America prompted by heightened fears of a trade war between the US and China.

The FTSE 100 index suffered its biggest percentage fall since the day after the EU referendum in June 2016 – closing almost 218 points lower at 6,704.

Related: £56bn wiped off FTSE 100 in biggest market fall since Brexit vote

Here’s a reminder of the size and scale of today’s market selloff – big losses across Europe and the America….

Jamie Dimon, the CEO of JP Morgan, believes the US-China trade dispute is the primary issue hurting markets.

He told CNBC that investors are worried about how bad the situation will get [a good question, now that Huawei’s CFO is facing extradition to the US].

The U.S. under the Trump administration has engaged in an escalating trade war with China, though the two sides are talking and set a 90 day time frame from Dec. 1 to get an agreement.

Dimon called it a trade “skirmish.” But it is forcing business leaders to find new supply lines, rethink investments or hold off on investments. “Those things are just causing uncertainty, which causes volatility.”

Jamie Dimon says the market is getting ripped around thanks to the trade war

Dow well off session low, down only around 300 points after earlier 785 point drop

With one hour to go until Wall Street closes for the day, the Dow Jones industrial average is solidly in the red.

The Dow is down 350 points – with almost every share still down today. Boeing and JP Morgan lead the fallers

Ian King, Sky News’s business editor, reckon president Trump must take responsibility for the falling stock markets.

He writes that Trump’s trade war with China has alarmed investors, and weakened shares:

Mr Trump, who tweeted regularly when the stock market was breaking new records earlier this year, has had very little to say about these recent falls.

However, if he is being honest with himself, he will know he is to blame.

Back in New York, shares are bouncing back from their earlier lows.

The Dow is now only down 330 points, or 1.3% — a chunky fall, but less severe than the 700-point slump earlier.

[CHART] With 2 hours remaining in US trade , equities are recovering off session lows which saw the Dow down almost 800 points at session lows #ausbiz

Fears of a global downturn have hit markets today, says Patrick Schaffer, global investment specialist at J.P. Morgan Private Bank.

“The market seems right now to be focused on increased risks for a 2020 recession.

“It’s a very hard market to buy when you see really strong signals that we are indeed late (in the economic) cycle.”

The market mayhem may bring some relief to hard-pressed US consumers. The odds of American interest rates being hiked in 2019 have fallen sharply.

The market puke has led traders to dramatically ratchet back bets on Federal Reserve rate increases over the coming yeas, with the biggest implied odds now on an extended “pause” through 2019.

The big picture is that most global stock markets have lost ground this year.

The FTSE 100 was already down more than 10% since the start of January, before today’s rout. The German DAX was down 16%, while China’s market has plunged by a fifth.

More than half of the key country stock market ETFs we track are now in bear markets. The US $SPY is now the only one NOT down double-digit percentage points from its highs. $$

Worst day for European stocks since initial #brexit vote in 2016

Sky News have a good take on the selloff:

A global share sell-off has seen the FTSE 100 slump on the same scale as the day after the Brexit referendum in 2016.

The decline of 3.15%, or 218 points – wiping £56bn off the value of the FTSE’s constituent companies – came after the arrest of a top Chinese executive on behalf of the US triggered renewed fears of a trade war.

FTSE 100 suffers worst one-day fall for more than two years closing more than 3% lower — Sky News

Back in New York, Wall Street continues to suffer its own day of losses.

The Dow Jones industrial average is currently down 500-ish points, or 2%, at 24,517. That means the benchmark index has lost all its gains for 2018.

Today’s sell-off also means the FTSE 100 is actually below its level on 30th December 1999, the final day of the last millennium.

WOW: British stocks have lost all their gains for the entire 21st century. Leading index back to 1999 level, @ksengal via @markets

Today, sentiment is vastly different from the end of the 1990s. Animal spirits were out of control in 1999, which led to the substantial overvaluation of the UK stock market. Now the Footsie is desperately unloved because Brexit means many investors want to put a good-sized bargepole between themselves and the UK stock market.

Despite the headline value of the FTSE 100 today being close to its 1999 peak, investors in the UK stock market are putting money to work at a much cheaper level, once you take company profits into account. In 1999 the UK stock market was valued at 27 times earnings, today it stands at around 15 times earnings. While in the short term it’s entirely plausible the UK market could fall further, a lower valuation suggests better long term returns are on offer.

Mohamed El-Erian of Allianz reckons that shares took a dive today as investors raced to sell riskier assets, fearing more turmoil ahead.

The current selloff in #stocks has the feeling of people getting the (figurative) tap on the shoulder telling them “reduce risk now, ask questions later.” #markets #economy #investing #investors

Fiona Cincotta, senior market analyst at City Index, says the shock arrest of Huawei’s CFO was a big factor behind today’s market meltdown.

For China the Huawei arrest will add insult to injury as the arrested executive, Meng Wangzhou, is not only the company’s CFO but also the Huawei founder’s daughter and the prospective company successor and concerns are growing that the country could retaliate with arrests of US executives.

Although Meng Wangzhou was detained in Canada on suspicions of breaching sanctions against Iran the arrest highlights a different set of tensions between the US and China – the issue of cybersecurity. The US has long suspected Huawei of foul play in cybersecurity and has restricted the sale of its 5G equipment in the US for fears that it might be used for dubious purposes.

Today’s sell-off has driven the FTSE 100 index down to its lowest close in over two years.

If you’re just tuning in, there are three reasons why markets are falling sharply today.

1) News broke last night that the chief financial officer of one of China’s biggest companies, Meng Wanzhou of Huawei, has been arrested in Canada.

Related: China demands release of Huawei executive arrested in Canada

In points terms, the FTSE 100 has suffered its biggest drop in over three years.

FTSE 100 closed down 217 points today – largest one day point decline since August 24, 2015

A reminder that all European markets suffered a bad day:

European Closing Prices:#FTSE 6704.05 -3.15%#DAX 10810.98 -3.48%#CAC 4780.46 -3.32%#MIB 18643.83 -3.54%#IBEX 8764.5 -2.75%

Nearly every company on the FTSE 100 fell today, apart from precious metals producers (who benefitted from a dash into gold and silver).

Energy firms slumped by 4.5%, mining companies fell 4%, banks lost 3.9%, and industrial groups lost 2.7%.

After a day of wild selling, and deepening losses, London’s stock market has just posted its biggest one-day loss since the UK voted to leave the European Union.

The FTSE 100 has just closed down 217 points, a fall of 3.15%, at 6704.

European stock markets have suffered their worst day since Britain voted to leave the EU.

The Stoxx 600 index, which includes Europe’s biggest stocks, has just closed for the night, down 3.3%.

The selloff on Wall Street is deepening, fast.

The Dow has now tumbled by 760 points, as the rout accelerates.

Britain’s stock market has just endured one of its worst days in several years….

The FTSE 100 has now fallen by more today than it did on day after Brexit vote in June 2016 – down 3.3 per cent, worst since Jan 2016

Here’s David Madden, market analyst at CMC Markets UK, on today’s market mayhem:

Equity markets suffered severe losses as investors are worried the relationship between the US and China has been strained by the arrest of Meng Wanzhou, the CFO of Huawei.

The Chinese businesswomen faces possible extradition to the US as the company is alleged to have breached sanctions in relation to Iran. The US-China relationship was moving in the right direction after the G20 summit, and now dealers feel all the good work could be undone.

Here’s the scene on the New York stock exchange today, as traders reel from another heavy sell-off:

There’s no respite on Wall Street. Instead, the Dow is now down by 525 points, or 2.1%.

Over in Frankfurt, the DAX index has slumped by over 3%.

That takes the index of leading German companies into a full-blown bear market, more than 20% below its recent peak.

Ouch! #Germany‘s Dax now in bear market territory: Benchmark Index has lost >20% from Year high!

Back in London, shares are hitting new two-year lows.

The FTSE 100 index has now slumped by 2.8%, or 196 points, to 6724.

America’s banks are also being pummelled in early trading, on fears of an economic slowdown.

Bank of America has shed 4%, while JP Morgan has lost over 3%.

The U.S. yield curve has moved into inversion, a classic signal that a recession is on it’s way. Here’s what that means:

Shares in US semiconductor-makers are leading the selloff on Wall Street.

Broadcom, Micron, Intel and AMD are all in the red; they’d suffer badly if the US-China trade dispute intensifies, as so many tech products are assembled in Chinese factories.

DING DING! The Wall Street opening bell is being rung, kicking off what could be a brutal trading session.

The Dow Jones industrial average has dropped by 1.85%, or 466 points, to 24,560.

BREAKING: Dow plunges more than 420 points at the open amid China trade tensions, fears of economic slowdown

Peter Cardillo, chief market economist at Spartan Capital Securities, says traders need their best tin hats today:

“The indices are headed for another tumble as the previous steep sell-off extends itself on a host of negative news.

The arrest of Huawei CFO is putting in doubt the trade truce between the U.S. and China.”

Unless Wall Street traders recover their nerve very quickly, we’re heading into a hefty selloff at the open.

The Dow Jones industrial average is expected to drop by more than more than 1.5%, which would be 400 point-plus plunge.

Time for a a quick catch-up on the markets, as we brace for a bruising Wall Street open in under 30 minute’s time.

Britain’s FTSE 100 is still wallowing at a two-year low, down 172 points or 2.5% at 6748.

This is likely to escalate the tense relationship between China and the US further. Both tech and automotive stocks have been the biggest fallers – the events emphasise the vulnerability of markets to any issues, particularly political ones, involving the world’s two largest economies.

This has sent shockwaves not only across European stock markets but around the world with Asia the worst affected as investors’ early optimism about the weekend developments in trade talks dissipates. This is likely to set up a turbulent end to the year for markets and will leave investors anxiously awaiting the next development.”

Newsflash: America’s trade gap with China has hit a record high; news that may send Donald Trump’s blood pressure rising too.

#BREAKING: US trade deficit hits 10-year high on record imports

The latest US jobs data isn’t too encouraging.

American companies hired 179,000 new workers last month, according to payroll firm ADP. That’s 16,000 fewer than expected, and may show that the US labor market has peaked.


How big is Meng Wanzhou’s arrest? Massive, argues Politico’s Marty Kady:

The arrest of the Huawei executive is a BIG deal in China and is probably being underplayed in the US news cycle. Equivalent of an Apple or Facebook exec being arrested in China.

Brad Bechtel of US investment bank Jefferies thinks Meng Wanzhou’s arrest could trigger a new front in the US-China trade war.

He writes:

Everyone is focused on the Hauwei CFO’s arrest in Canada on allegations that Hauwei violated Iran sanctions.

The arrest was ordered by the US and extradition is expected. Concern of course that the arrest will damage the fragile trade truce between the two nations. If anything it tells you the administration’s willingness to continue to toe the hard line on this issue and to not back down. It leads me to believe we will have a rocky road on this for the next few months and that the game has not yet begun.

Shortly after news of Mang Wanzhou’s shock arrest broke, China announced that it will immediately start implementing its side of the trade truce with America.

Commerce ministry spokesman Gao Feng told reporters that:

“China will immediately implement the consensus both sides already reached on agricultural products, energy, autos and other specific items.”

Related: China to ‘immediately’ apply measures agreed in trade truce with US

China expert George Magnus has tweeted about why the arrest of Huawei’s chief financial officer last weekend matters:

So – in case it’s passed you by, Wangzhou Meng, Huawei’s CFO and daughter of ex PLA officer founder and CEO, was arrested in Canada pending poss extradition to the US re Iran sanctions busting. It’s a big deal 1/n

Coming at a time when the US and Chinese sides are not aligned about what was agreed at G20, and when relations are, shall we say, frosty, this isnt going to help. For Trump, poss a bargaining chip – unexpected since he prob was unaware. For Xi Jinping, just rage. 2/n

Huawei has already been banned by Oz, NZ and most recently BT wrt 5G network. US is warning allies away from it and other Chinese tech firms on Nat Sec grounds. Remember also ZTE which was almost bankrupted b4 Trump backed off. Important issue here 3/n

Huawei is private company but private incorp in China doesn’t mean what we think it means in west. As recently you revealed re Jack Ma, where Party and corporate/shareholder interests conflate, Party always wins. So contracts w/ Huawei, eg, are de facto with CCP interests 4/n

How this affects trade war is important. If Trump backs away for something tangible, maybe dispute will stabilise better. China’s already announced new punishments for IP theft independently tho we will c what that means in practice. If not, optics just got a lot worse.

The European technology sector has slumped by 3.3% today, helping to drag markets down to two-year lows.

The arrest of Huawei’s Meng Wanzhou is fuelling fears that the US-China trade war will flare up again. Any additional tariffs on Chinese exports would hurt tech companies — last week, Donald Trump mused about slapping new tariffs on iPhones, for example.

America is waking up to the news that markets are sliding….

Dow futures -446 points…

The sell-off is turning into a full-blown slump!

European stocks have plunged to their lowest level since December 2016, as investors become increasingly panicky.

Asian markets were knocked sideways by the arrest of a senior Huawei official in Canada as the move sparked fears that tensions between the US and China would yet again intensify. FTSE, European gauges and Dow futures were also not spared with the heavily export-oriented DAX losing 1.5%.

Tech stocks in Asia were the hardest hit, in particular Samsung, Tokyo Electron, TDK and Tencent, pulling down Asian indexes. The US already has a low-key conflict simmering with the Chinese tech giant and has, alongside New Zealand, already blocked Huawei from selling their 5G technology in the country for fear that it could be used for malicious purposes. The latest arrest will be seen as a heavy slap in the face in China as the arrested executive, Meng Wanzhou, is the company’s CFO and the daughter of Huawei’s founder. She was detained in Canada and could end up being extradited to the US as the company is suspected of breaching sanctions against Iran.

For different reasons, a majority of MPs in parliament seem set to vote down Mrs May’s deal on the first attempt. With the lower risk of a hard Brexit, Conservative Remainers might feel less compelled now to back the deal in a second vote. Ironically, Mrs May’s chances could now lie in the hands of the Brexiteers. If they realise the game for a hard Brexit is up, they might prefer the deal to the other options of a softer Brexit or no Brexit at all. But this is a long shot. We cut the chances for Mrs May’s deal to 25% from 45%.

We now see: a 20% chance that the UK will sign up to the EU customs union and single market for goods (up from 10%); a 20% chance that the UK will remain in the European Economic Area via entry into the European Free Trade Association (the Norway option, up from 12.5%); and a 25% chance that Brexit is reversed (up from 12.5%)

A look at Brent after Saudi energy minister Al-Falih says OPEC hasn’t reached an agreement about cuts yet, and that 1 mb/d cut would be adequate #OOTT

Brent oil -5% back below $60/barrel as OPEC meets, output cut not yet confirmed. Underscoring how volatile/weak oil has been lately, today’s 5% fall is only the fourth biggest decline in the last three weeks.

Wall Street is heading for heavy losses in four hours time.

The Dow Jones industrial average is currently expected to plunge by around 500 points, adding to its 800-point lurch on Tuesday (Wall Street was closed yesterday).

Markets accelerating falls – Dow Futures now 500 points lower and DAX over 300 points weaker.

Anxiety over Brexit is pushing shares down, compounding trade war fears, says Vincent-Freědeěric Mivelaz of Swissquote Bank.

Asian shares continue down, after Canadian authorities confirmed the arrest of Huawei Technologies’ CFO Wanzhou Meng on charges of violating the USA’s sanctions on exports to Iran. Japan’s Nikkei 225 dropped by 1.91% while Hong Kong’s Hang Seng and China’s CSI 300 declined 2.47% and 2.16%, their most in two weeks.

European shares are also dropping, as the UK Parliament mutinies over the Prime Minister May’s Brexit plan. The Euro Stoxx 600 has hit a 2-year low while Germany’s DAX and France’s CAC 40 slid 1.90% and 1.85%.

The FTSE 250 index, which contains smaller, UK-focused companies, is also taking a bath.

It’s currently on track for its biggest one-day fall since the rout after the EU referendum – currently down 460 points, or 2.5%, at 17809.

It’s turning into a rout in London.

The FTSE 100 has now slumped by 176 points, or 2.5% — on track for its worst daily performance since February!

Although Meng Wanzhou’s arrest is a shock, Huawei has been facing growing criticism for several years.

Huawei has been in the sights of US security officials, and the latest move comes as the Trump administration takes an aggressive stance towards China. In a speech in October, Mike Pence, the US vice-president, put China on notice that Mr Trump was prepared to take a harder stance against Beijing than his predecessors.

The Shenzhen-based group has long been a lightning rod for concern about corporate espionage and cyber security. Western intelligence officials worry that reliance on Huawei by other countries could allow China to penetrate foreign telecom networks.

Related: BT removing Huawei equipment from parts of 4G network

Emerging economy stock markets are having a particularly bad week:

MSCI Emerging Markets Future down almost 5% during the last three trading days… #TradeWar

Worries over global economic growth, rising interest rates and the US/China trade war are all driving markets down, says Russ Mould, investment director at AJ Bell.

He agrees that the arrest of Huawei’s CFO has alarmed investors, who fear it will “stir up tensions between China and the US.”

“All these are considered to be defensive stocks, offering goods and services people would buy regardless of economic conditions. Diageo is perhaps an exception as an alcohol seller yet investors often turn to large, robust business in times of strife. That may also explain why Unilever and Compass declined much less than the broader market.

“The fallers were led by mining stocks which are always sensitive to any fears over the global economy and China.

This chart shows how the FTSE 100 is back below its level at the end of the last millennium, just before the dot-com boom ended.

Total return of the FTSE 100 vs. the total return of the S&P 500, both in U.S. dollars, since the Millennium

The selloff in London is gathering pace!

The FTSE 100 has now shed 1.5%, or 110 points, leaving it firmly slumped at a two-year low.

Stocks are down across Europe too.

The Stoxx 600 index has hit a six-week low, dragged down by technology stocks and car makers (who would both suffer from a US-China war).

The City is reeling from the fallout following the arrest of Huawei’s Meng Wanzhou, says Connor Campbell of SpreadEx:

Jeez it has been an intense week for US-China relations. The post-G20 trade truce is starting to feel like a distant memory, with Tariff Man Donald Trump, and now the arrest of Huawei’s Meng Wanzhou, serving to undermine whatever (naïve) hopes of progress had built up on Monday.

Wanzhou, global chief financial officer of telecoms equipment at the Shenzen-based smartphone firm and daughter of its founder, was detained in Canada last Saturday and is now facing extradition to the USA, relating to an investigation into whether or not she violated sanctions against Iran.

Ouch! Britain’s FTSE 100 has fallen by over 80 points at the start of trading, a drop of 1.2%.

That takes the blue-chip index of top shares in the City down to 6840 points, its lowest level in two years.

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.

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.

Huawei is insisting on Meng Wanzhou’s release, insisting they aren’t away of any misconduct:

#Huawei says it’s not aware of any misconduct by its CFO Ms. Meng and very little info about the specific allegations has been provided, adding that it complies with all applicable laws in countries where it operates and export controls & sanctions applicable to UN, US & EU.

Technology stocks have been hit particularly hard in Asia today.

In Hong Kong, Tencent was off more than 4%, while AAC and Sunny Optical each fell around 6%.

Meng Wanzhou’s arrest will probably exacerbate tensions between the US and China, my colleague Lily Kuo reports:

US authorities have been investigating Huawei since at least 2016 for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws, sources told Reuters in April.

Huawei, one of the world’s largest makers of telecommunications network equipment, said in a statement that Meng had been “temporarily detained” and faced unspecified allegations” in the Eastern district of New York.

Related: Huawei CFO arrested in Canada on suspicion of violating US sanctions

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Asian markets and US futures plummeted overnight as news broke that Huawei’s CFO had been arrested in Canada to be extradited back to the US. The CFO, Wanzhou Meng, was arrested for allegedly breaching Iran sanctions. China criticized the US and Canada for the arrest, demanding her immediate release.

Traders have quickly moved out of riskier assets reflecting nerves that the arrest is likely to escalate tensions between the US and China once again.

#FTSE100 called -55pts at 6865

Asia stocks slumped w/ US Futures as US-China trade tensions escalate once again after Canada arrested Huawei CFO for extradition to US AND US yield curve edged closer toward inversion. US 10y yield drops <2.9% bringing 2s/10s spread to 11bps. Oil subdued ahead of Opec meeting.

Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!

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