A man passes a screen showing the activity of the FTSE index at Canary Wharf financial district in London.
London: UK shares were sharply lower on Thursday, hitting their weakest levels in two years as oil and mining stocks fell and investors shunned sectors they consider risky after the arrest of a top Huawei executive renewed worries about U.S.-China trade tensions.
At 0930 GMT, the FTSE was down 1.9 percent after hitting its lowest since December 2016 as a broadbased sell-off swept European bourses. The midcap FTMC was down 1.5 percent.
Carmakers and technology stocks, considered most sensitive to the prolonged spat between the world’s two largest economies, led the falls on euro zone indices.
In the UK market, oil and mining stocks were down 2.4 percent and 2.9 percent respectively, the biggest drag on the blue-chip index as crude and metal prices sank.
“Investors are in the mood to accentuate all the negative news at the moment,” said Ian Williams, analyst at Peel Hunt.
Crude futures fell more than 2 percent as a deal among OPEC members to cut output at their producer group’s meeting later in the day appeared unlikely.
Copper fell for a fourth day after the chief financial officer of Chinese technology giant Huawei was arrested in relation to alleged violations of U.S. sanctions.
Investors were fretting that the arrest could drive a wedge between China and the United States just days after President Donald Trump and President Xi Jinping agreed to a temporary truce in their trade war to give the two sides more time for negotiations.