- Global stocks were plunging again Thursday after the arrest of the Chinese tech giant Huawei’s CFO escalated an already fraught trade relationship between the US and China.
- The news added to market worries about the state of global trade, and US index futures declined while all major European and Asian share indexes fell sharply lower.
- US markets were closed Wednesday for the funeral of George H.W. Bush. Trading on US futures had to be stopped several times overnight, however, after high volatility led to huge price swings.
- Oil was tumbling as well ahead of an OPEC meeting in Vienna.
- You can follow the latest market movements with Markets Insider.
US stock futures took a sharp move downward Thursday, a sign the global stock rout is set to continue amid heightened trade-war fears after the US-led arrest of a Chinese executive.
Meng Wanzhou, the CFO of the Chinese tech giant Huawei, was arrested in Canada on suspicion of attempting to evade newly implemented US sanctions. The news, which emerged Wednesday, took investors further from their buoyant mood at the start of the week when tensions seemed to ease between China and the US. Investors have now lost confidence in the long-term effectiveness of the agreement struck between President Donald Trump and Chinese President Xi Jinping at the G20 summit.
Russ Mould, the investment director at AJ Bell, said investors might fear the arrest would raise tensions between China and the US.
“Having swung between optimism and skepticism 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,” Mike van Dulken, the senior markets analyst at Accendo Markets, wrote on Thursday morning.
Meng’s arrest centers on US sanctions that kicked in at the start of November. The news initially spooked Asian investors, with all mainland Chinese and Hong Kong stocks dropping sharply during trading. Fears have spread, with all major European indexes and US index futures falling by at least 1.7%. Here’s the scoreboard:
- S&P 500 and Dow Jones Industrial Average futures were each down 1.7% on Thursday morning. Nasdaq futures were plunging 2.3%.
- The benchmark Euro Stoxx 50 was down 2.2%, Germany’s DAX was 2.5% lower, and Britain’s FTSE 100 was down 2.7%, lower than it was at the start of 2000.
- The Shanghai Composite closed 1.7% lower, Hong Kong’s Hang Seng was down 2.6%, and Japan’s Nikkei 225 was down 1.9%.
Markets were so spooked that trading on US futures had to be stopped several times overnight after high volatility led to huge price swings.
China fires back
The Chinese Embassy in Canada had strong warnings about the arrest.
“The Chinese side firmly opposes and strongly protests over such kind of actions which seriously harmed the human rights of the victim,” China said in a statement on its embassy’s website. “The Chinese side has lodged stern representations with the US and Canadian side, and urged them to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng Wanzhou. We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens.”
CME Group had to repeatedly halt trading in US stock futures for brief periods Thursday morning because of violent price moves, an unusual intervention that has stunned traders. US markets had been closed Wednesday amid the funeral of former US President George H.W. Bush.
Oil is plunging
Elsewhere in markets, oil was jittery ahead of a final meeting of the year by members of the OPEC cartel of oil producers in Vienna.
At the meeting, set to begin later Thursday, member states are expected to agree to cut oil production by about 1.3 million to 1.5 million barrels a day, but traders Thursday morning seemed unconvinced, with both Brent and West Texas Intermediate sliding.
Brent crude, the international benchmark, tumbled 4.3%, while the US-centric WTI crude was off 4.2%.