Global tensions wipe £50bn off value of major UK firms

MORE than £50billion was wiped off the value of Britain’s top companies yesterday as the escalating trade war and global growth fears hit markets.

There were similar drops across Europe and the US as UK shares crashed to a two-year low.

Fragile investor confidence that America and China could ease relations was shattered after the arrest of Huawei telecoms finance executive Meng Wanzhou.

She faces extradition from Canada to the US but Beijing is calling for her release as political tensions mounted.

Her detention is thought to be related to alleged violations of US sanctions against Iran. China and America have begun three months of talks aimed at de-escalating a tit-for-tat trade battle. It has seen the US impose three rounds of tariffs on Chinese imports this year totalling $250billion (£195billion).

Laith Khalaf, senior analyst at investment firm Hargreaves Lansdown, said: “The arrest of Huawei’s chief finance officer [Wanzhou] has reignited fears that trade reconciliation between the US and China may not be forthcoming any time soon.” He added: “The market is spooked by the damage a continuing trade war could do to global economic prospects, and that’s hitting share prices in the UK and overseas.”

Andrew Kenningham, chief global economist at Capital Economics, added: “World trade will probably weaken even with a ceasefire in the US-China trade war.”

The FTSE 100 fell 217 points to 6704, mirroring three per cent falls across European markets. Wall Street was trading nearly two per cent down by the UK close.

TED Baker has appointed law firm Herbert Smith Freehills to carry out an independent external probe into harassment allegations against its boss.

The designer brand said findings would be reported to a committee of the company’s non-executive directors chaired by Sharon Baylay.

Founder and chief executive, Ray Kelvin, has been accused of enforcing a “hugging” culture.

The claims of inappropriate behaviour have further depressed a share price that has halved since March amid unseasonal weather and House of Fraser disruption.

The firm posted a 0.2 per cent drop in revenue in the 16 weeks to December 1 in “challenging external trading conditions”.

This reflected an anticipated decline in wholesale sales due to the timing of deliveries. Total sales including e-commerce rose by 2.3 per cent.

It has opened licensed stores in India, Kosovo, Saudi Arabia, Singapore and South Korea.