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Global Markets: Shares spiral on arrest of China executive; oil sinks as output decision delayed

Reuters  |  NEW YORK 

By Laila Kearney

(Reuters) - Stock markets around world tumbled on Thursday as the arrest of a top Chinese cast further shadows on U.S.-trade relations, while sank on fears of smaller-than-expected output cuts.

The arrest of maker Technologies Co.'s in for extradition to the came as and prepared for key talks aimed at resolving a bitter trade spat.

The Dow Jones Industrial Average fell 679.46 points, or 2.71 percent, to 24,347.61, the S&P 500 lost 67.8 points, or 2.51 percent, to 2,632.26 and the Nasdaq Composite dropped 139.83 points, or 1.95 percent, to 7,018.60.

MSCI's gauge of stocks across the globe shed 2.53 percent, while the pan-European STOXX 600 index lost 3.31 percent.

Emerging market stocks lost 2.76 percent. MSCI's broadest index of shares outside closed 2.28 percent lower, while Japan's Nikkei lost 1.91 percent. Canadian authorities late on Wednesday said they had arrested Meng, also the daughter of Huawei's founder, on Dec. 1, the same day that U.S. and Chinese leader met at the summit in

The world's two economic superpowers had agreed on a 90-day trade truce period to hammer out a more permanent agreement, which sent global stock markets soaring on Monday. Equities reversed course the next day as uncertainty grew that the U.S. and could, in fact, find common ground.

"In general, we all have the same questions we did on Tuesday," said Art Hogan, at in "The on throws another level of uncertainty on our ability to actually come to some agreement with "

China's foreign ministry said neither nor the had clarified the reason for the arrest, but a source earlier told it was related to violations of U.S. sanctions.

Earlier this week, shorter-dated yields rose above medium yields for the first time since early 2008, which fanned fears about a U.S. recession in the coming months and also sent Wall Street shares sliding.

yields tumbled on Thursday with 10-year yields hitting three-month lows as worries about U.S.-China trade and Brexit spurred safe-haven bids.

Additionally, traders scaled back expectations on the number of rate hikes the Federal Reserve would implement amid weakening economic data and market volatility.

U.S. jobs data is due on Friday. If the figures show any serious weakness, markets are likely to react, said Shuji Shirota, HSBC's of macro economic strategy.

The U.S. dollar weakened against major peers as Treasury yields slipped and traders scaled back rate hike expectations.

The euro was 0.39 percent higher against the dollar at $1.1388.

Also pulling down equity markets were

Oil fell more than 4 percent in choppy trading after ended a key meeting having made no decision on crude output, as it prepared to debate the matter with other exporters the next day.

An delegate said the organisation had agreed a tentative deal to cut but had not yet come up with a final figure.

U.S. crude sank 4.65 percent to $50.43 per barrel and Brent was last at $58.86, down 4.39 percent on the day.

The two have lost 30 percent in value this quarter alone, but this week's meeting could bring more surprises.

"The real impact of the meeting will be evident (on Friday) following the release of the OPEC+ joint declaration," said Abhishek Kumar, at

(Additional reporting by Marc Jones, Amanda Cooper; Editing by Bernadette Baum)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 06 2018. 22:22 IST