UPDATE 2-European shares plunge to two-year low as Huawei arrest triggers global selloff

Reuters

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    * STOXX 600 hits lowest level since December 2016
    * Auto, tech stocks among those leading declines 
    * Huawei rival Ericsson gains; Huawei supplier STM drops
    * Oil stocks fall before OPEC meeting on output cuts

 (Updates prices, adds details, quotes, graphic)
    By Danilo Masoni and Helen Reid
    LONDON, Dec 6 (Reuters) - European shares sank on Thursday
after the arrest of a top executive at China's Huawei fanned
worries over the Sino-U.S. trade war, sending global stocks
spiralling downward with tech and auto among the worst-hit
areas.
    Huawei's CFO, Meng Wanzhou, was arrested in Canada and faced
extradition to the United States, a development that cast doubt
on a 90-day truce on trade struck between presidents Donald
Trump and Xi Jinping on Saturday.  urn:newsml:reuters.com:*:nL1N1YA1YR
    The pan-European STOXX 600  .STOXX  plunged 3.1 percent to
its lowest level since December 2016. The index suffered its
worst one-day fall since the Brexit vote aftermath of June 2016.
    European shares were slumping for their third day in a row,
after dropping earlier this week on concern over an economic
slowdown in the United States.
    "I do believe people are thinking about the U.S.-China trade
dynamic too narrowly," said Norman Villamin, chief investment
officer at Union Bancaire Privée.
    "It's not about trade - it's about who is going to be the
economic and political leader of the world in 10-20 years from
now. It's about tech, and who is going to dominate that
landscape," he added.
    Germany's export-oriented DAX  .GDAX  index, which has been
weakened by concerns that trade tensions would curb growth in
China's economy, slid 3.5 percent to hit a two-year low. 
    Auto stocks  .SXAP  were the biggest fallers, plunging 4.2
percent to their lowest since July 2016, led by a 7.3 percent
fall in tyre maker Faurecia  EPED.PA  and a 6.3 percent drop in
German carmaker Daimler  DAIGn.DE . 
    Tech  .SX8P  shares tumbled 3.1 percent. Huawei supplier
STMicro  STM.MI  lost 4.7 percent, AMS  AMS.S  sank 10.7 percent
and Dialog Semi  DLGS.DE  fell 4.2 percent. 
    Ericsson  ERICb.ST  and Nokia  NOKIA.HE , rivals of Huawei,
outperformed as traders calculated they might gain from
potential U.S. crackdown on the Chinese firm. 
    "These tactics could effectively create a duopoly in the
Western markets for Ericsson and Nokia for 5G," said Neil
Campling, co-head of the global thematic group at Mirabaud
Securities. 
    A Wall Street Journal report last month said the U.S.
government was trying to persuade wireless and internet
providers in allied countries to avoid equipment from Huawei.
    BT  BT.L  said on Wednesday it was removing Huawei equipment
from the core of its 3G and 4G mobile operations and would not
use the Chinese firm in central parts of the next network.
 urn:newsml:reuters.com:*:nL8N1YA28M
    "This is going to be the epicentre of a bloody IP war," said
a trader.
    Denmark's Simcorp  SIM.CO  was the only tech stock in the
black, rising 6 percent after it announced an 8-year license
agreement with an Asian investment company.  urn:newsml:reuters.com:*:nFWN1YB04T
    Indivior  INDV.L  shares skidded 11.4 percent, the
worst-performing on the STOXX, after STOXX Ltd announced it
would be demoted from the index.  urn:newsml:reuters.com:*:nL8N1YB15I
    In France, shares that had been hit by recent protest over
fuel-tax plans, such as retailer Carrefour  CARR.PA , motorway
operator Vinci  SGEF.PA  and hotel group Accor  ACCP.PA , fell
3.5 to 4.9 percent. 
    President Emmanuel Macron's government said on Wednesday it
was dropping further fuel-tax increases in next year's budget in
the face of protests across the country.  urn:newsml:reuters.com:*:nL8N1YA1HC      
    Oil stocks  .SXEP  lost 3.7 percent as crude oil prices fell
after OPEC ended a key meeting having made no decision on crude
output.  urn:newsml:reuters.com:*:nL4N1YB17O
    No sector in Europe was spared from the selloff, but the
outperformers were those considered "defensive" for their high
dividends and stable earnings, like telecoms, utilities, and
real estate stocks. 
    

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STOXX erases two years of gains Dec 6    https://tmsnrt.rs/2QeMdsm
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 (Reporting by Danilo Masoni and Helen Reid; Editing by
Josephine Mason/Mark Heinrich)
 ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))

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