* 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.
The pan-European STOXX 600 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
"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 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 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 and a 6.3 percent drop in German carmaker Daimler .
Tech shares tumbled 3.1 percent. Huawei supplier STMicro
lost 4.7 percent, AMS sank 10.7 percent and Dialog Semi fell 4.2
Ericsson and Nokia , 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 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.
"This is going to be the epicentre of a bloody IP war,"
said a trader.
Denmark's Simcorp was the only tech stock in the black, rising
6 percent after it announced an 8-year license agreement with an Asian
Indivior shares skidded 11.4 percent, the worst-performing on
the STOXX, after STOXX Ltd announced it would be demoted from the
In France, shares that had been hit by recent protest over
fuel-tax plans, such as retailer Carrefour , motorway operator Vinci
and hotel group Accor , 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.
Oil stocks lost 3.7 percent as crude oil prices fell after OPEC
ended a key meeting having made no decision on crude output.
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
STOXX erases two years of gains Dec 6
(Reporting by Danilo Masoni and Helen Reid; Editing by Josephine
((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
firstname.lastname@example.org; On Twitter ))