Europe Markets: European stocks slump on slumping oil prices, fallout from arrest of Huawei executive

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European stocks were down sharply on Thursday amid slumping oil prices, concerns about global economic growth and the arrest of a high-profile Huawei executive aggravating the resurfaced U.S.-China trade-war fears.

Banking, oil and tech stocks led the decliners.

What are markets doing?

The Stoxx Europe 600

SXXP, -2.18%

 dropped 2.2% to 346.58, after ending down 1.2% on Wednesday.

Germany’s DAX 30

DAX, -2.48%

skidded 2.5% to 10,924.68, while France’s CAC 40

PX1, -2.30%

 dropped 2.2% to 4,833.07. The U.K.’s FTSE 100

UKX, -2.20%

 also lost 2.2%, trading at 6,757.74.

Italy’s FTSE MIB Italy index

I945, -2.50%

 slumped 2.4% at 18,858.91.

The euro

EURUSD, +0.0529%

 was essentially unchanged at $1.1349 from $1.1344 late Thursday in New York.The British pound

GBPUSD, +0.2905%

 nudged barely higher to $1.2749 from $1.2735.

What is driving the market?

U.S. stock futures tumbled Thursday after the arrest of Meng Wanzhou, the chief financial officer of Huawei Technologies, by the Canadian authorities reignited trade worries that helped drag equities to their worst session since early October on Tuesday. Futures selling was so intense at one point Thursday that circuit breakers were triggered.

U.S. markets were closed Wednesday to mourn former U.S. President George H.W. Bush.

Chinese authorities reacted aggressively to the arrest, with the spokesperson of the Chinese Embassy in Canada demanding the release of the Huawei executive.

The latest development have surfaced amid ongoing doubts surrounding the trade deal agreed by the U.S. and China at the G-20 summit at the weekend.

The two-day OPEC meeting starts on Thursday, and oil prices sunk amid no signs yet of a deal to cut production. A flurry of U.S. economic data will provide more insight on the state of the economy. Investors have been spooked by an inversion in the front end of the Treasury yield curve that could signal a slowdown.

What stocks are active?

Heavyweight banking stocks were among the biggest losers on Thursday, with HSBC Holdings PLC

HSBC, -2.12%

HSBA, -2.71%

 and Lloyds Banking Group PLC

LLOY, -2.14%

 both falling by 2%.

Tech stocks ell sharply, with Capgemini SE plunging more than 7%

CAP, -7.29%

Steelmaker ArcelorMittal

MT, -4.25%

dropping more than 4%.

Oil stocks were under pressure, with Total SA

FP, -1.91%

 falling 1.9%, BP PLC

BP, -0.58%

 is down 2.7% and Royal Dutch Shell PLC

RDS.A, -1.86%

RDSA, -2.54%

 dropping 2.5%.

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