European stocks cratered on Thursday, amid fears of slowing growth, falling oil prices and a fresh flare-up in tensions between the world's two largest economies. The pan-European Stoxx 600 fell more than 3.3 percent with all and major bourses sectors in negative territory. The index clsoed at 342 points, marking a two year low. It was the worst daily percentage drop for the STOXX 600 since Brexit. Germany's Dax market, when measured on an intra-day basis has closed in bear market territory. 21 percent lower than its high in late January.

Market focus is largely attuned to the arrest of a top executive at Chinese tech giant Huawei, amid investor concern that the news could derail progress in U.S.-Sino trade talks. Europe's basic resources stocks — with their heavy exposure to China — tumbled 4.2 percent during the session. Britain's FTSE 100 index slumped 3.6 percent Thursday, as mining stocks plummeted. London-listed Antofagasta led the sectoral losses, down more than 7 percent. Meanwhile, autos stocks — seen as a trade war proxy because of the sector's export-heavy constituent's — were also among the worst performers, down more than 4.5 percent. Faurecia and Daimler both dropped more than 6 percent. Tech stocks were also down more than 3 percent on Thursday, following the arrest of Huawei's global chief financial officer in Vancouver on Wednesday. Meng Wanzhou, the daughter of Huawei's founder, was arrested by Canadian authorities on December 1, reportedly over the possible violation of sanctions against Iran. She now faces extradition to the United States. Looking at individual stocks, Italy's DiaSorin tumbled toward the bottom of the European benchmark Thursday morning, after Kepler Cheuvreux cut its stock recommendation to "hold" from "buy." Shares of the Milan-listed company fell more than 7 percent on the news.

Trade tensions

Wanzhou's arrest has sparked concern of a major collision between the U.S. and China, at a time when both economic powers were set to begin three months of negotiations aimed at de-escalating their global trade war. The U.S. and China had agreed to temporarily hold off on imposing additional charges against each other's goods over the weekend. President Donald Trump and President Xi Jinping's trade truce prompted global stocks to surge higher at the start of the trading week, but fading optimism over the political deal has since pared equity market gains. U.S. stocks fell sharply on Thursday as continuing fears over U.S.-China trade relations and concern over a possible global economic slowdown kept investors on edge. At the European closing bell, the Dow Jones Industrial Average had dropped 758 points, bringing its two-day losses to 1,500 points as Apple shares fell. The S&P 500 fell 2.8 percent, led by a decline in bank shares like J.P. Morgan Chase, while the Nasdaq Composite also dropped 2.4 percent. The S&P 500 fell back into correction territory, down 10 percent from its 52-week high.

Oil slump