LONDON MARKETS: FTSE Logs Worst Day Since June 2016

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12/06/2018 | 10:07 pm


By Anneken Tappe, MarketWatch , Emily Horton



Mining, oil and banking stocks drop



U.K. stocks were once again under pressure Thursday, recording their worst one-day percentage decline since late June 2016. Global stocks sold off amid slumping oil prices and escalating worries over U.S.-China trade relations following the arrest of a high-profile Huawei executive.



Oil, mining and banking stocks were particularly under pressure.



What did markets do?



The U.K.'s FTSE 100 closed down 3.2% at 6,704.05 points, logging its worst one-day percentage drop in nearly 18 months, and its worst point decline since late August 2015.



It was the FTSE's 11th down day in the past 15 sessions, and a new 52-week low. The index is down 12.8% in the year-to-date.



The British pound firmed to $1.2780 from $1.2735 late Wednesday in New York.



What was driving the market?



The arrest of Meng Wanzhou , chief financial officer of Chinese telecommunications company Huawei Technologies, in Canada by request of the U.S. reignited trade worries, leading U.S. stock futures to tumble on Thursday . Chinese authorities in turn demanded Wanzhou's release. Huawei said the company wasn't aware of any wrongdoing by her.



The latest developments have further driven investor doubts over the trade cease-fire agreement reached by the U.S. and China over the weekend at the G-20 summit.



Elsewhere, a two-day OPEC meeting kicked off, and oil prices sunk amid no signs of a deal to cut production during the European trading day. After hours, OPEC agreed a preliminary pact to cut output.



Uncertainty over whether U.K. Prime Minister Theresa May will get her proposed Brexit agreement through parliament on Dec. 11 remains a worry as well.







What stocks were active?



Heavyweight banking stocks were among the biggest losers on Thursday, with HSBC Holdings finishing down 3.6% and Lloyds Banking Group down 2.7%.



Oil stocks were under pressure as well, with BP and Royal Dutch Shell both closing down 4.5%.



Mining stocks skidded, with Rio Tinto finishing 3.7% lower, and Glencore closing 5.1% down. BHP Billiton(BHP.AU) ended 4.4% lower.





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