Boy oh boy. This week has been wild, and there’s still a way to go before it is over, with the Dow Jones facing a multi-index pile-up when it returns to action this afternoon.
With investors concerned that the arrest of Huawei (SZ:002502) exec Meng Wanzhou, and her potential extradition to the US over claims she may have broken sanctions against Iran, will do irrevocable damage to the fragile trade truce agreed at the G20 summit in Argentina, things were looking pretty bleak for the European markets.
The FTSE significantly ramped up its losses as the day went on, suffering a 2.7% decline that forced it back to 6750 for the first time in 2 years. The UK index suffered worse than most because of the weight of its commodity sector. For not only were the miners in deep distress over the potential for another nosedive in US-China relations, but BP (LON:BP) and Shell (LON:RDSa) plunged 3%-plus apiece as Brent Crude tumbled back under $60 per barrel ahead of the OPEC meeting in Vienna.
Over in the Eurozone the DAX and CAC joined the FTSE at a fresh 2 year nadir. The German index slumped back towards 10900 as it gave up 275 points, with the CAC approaching 4800 after falling 2.4%.
By the looks of it, the Dow Jones is going to do nothing to alleviate the situation when the bell rings on Wall Street. The futures have it losing nearly 500 points, a move that would take the Dow back under 24600, roughly where it started last week.
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