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FTSE dives amid trade war fears

A STOCK market bloodbath saw £56billion wiped off the FTSE-100 yesterday over fears of renewed US-China trade tensions.

They were sparked by the arrest in Canada of a senior official of Huawei, the Chinese technology company.

The London blue-chip share index closed down 217.79 points, or 3.2 per cent, at 6,704.05. France’s Cac was down 3.3 per cent while Germany’s Dax fell 3.5 per cent.

Huawei’s chief financial officer, Meng Wanzhou, faces possible extradition to the US after her arrest on suspicion of trying to evade sanctions against Iran.

A Chinese official said she had broken no US or Canadian laws and demanded Canada ‘immediately correct the mistake’ and release her.

David Madden, analyst at CMC Markets, said: ‘Equity markets suffered severe losses as investors are worried the relationship between the US and China has been strained by the arrest. It is a broad-based sell-off that we are seeing in London.’

Sterling was trading relatively flat against the US dollar and euro at 1.277 and 1.123 respectively amid continued uncertainty over Brexit.