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Stock markets across the world plunged Tuesday as a sharp downward trend in the technology sector hit valuations hard and the Dow index gave up all its gains for the year, dealers said.
In Europe and Asia, there was much talk about the surprise arrest of Carlos Ghosn, boss of the Renault-Nissan-Mitsubishi alliance, and stocks in the three companies plunged.
Stocks were extending ‘a losing streak, as tech drops into correction territory, earnings from retailers disappointed, and havoc at Nissan and Renault appear to be adding to anxious market sentiment,’ analysts at Charles Schwab said.
Jitters returned to trading floors following a report that US titan Apple had slashed production of its most popular handsets.
That came just a week after a supplier suggested the firm had cut orders, fanning speculation the latest incarnation of the gadget is not selling as much as hoped.
Analysts at Capital Economics said they forecast the tech sector will continue to underperform in the coming quarters because of expected economic weakness in both the US and China.
‘Given the highly-cyclical nature of the IT sector, we have been arguing for a while that growth in its earnings would be hit especially hard in these circumstances,’ they said.
In New York morning business, the Dow’s steep fall matched that of the previous day when worries about flagging growth among tech giants and US-China trade tensions triggered big sell-offs.
The Dow Jones index is now negative for the year to date.
Adding to downward pressure were an uncertain US interest rate outlook and political worries over both Brexit and Italy’s fiscal troubles.
‘Increasingly wobbly’ is how Oanda analyst Craig Erlam described the tech sector.
‘There still appears to be a lot of underlying anxiety in the markets which may prolong the current sell-off a little longer – with trade wars, the pace of US interest rate hikes, Brexit and the Italian budget standoff all being significant headwinds,’ he said.
‘Existential threat’
In Asia, Nissan lost 5.5 percent and Mitsubishi sank 6.9 percent as they prepared to sack Ghosn after it emerged he had been taken into custody as detectives looked into claims he under-reported his income for years.
Ghosn has long been a major player in the car industry and is credited with resurrecting the once-troubled Nissan, which he allied with Mitsubishi and France’s Renault.
He heads the Renault-Nissan-Mitsubishi alliance and serves as CEO of Renault.
‘Ghosn’s departure could be an existential threat for all three companies,’ noted Professor Andre Spicer at City, University of London.
‘Ghosn had built a complex alliance between three auto-makers,’ he told AFP.
‘However, the only thing holding it together was Ghosn. With him out of the picture, old differences between the companies could come to the fore.’
Renault’s share price closed 1.2 percent lower, extending Monday’s eight percent dive.
‘The market doesn’t consider the share’s fall to be a buying opportunity,’ said Cedric Besson, a portfolio manager at Gaspal Gestion.
Deutsche in Danske maelstrom
Shares in Deutsche Bank dropped sharply in Frankfurt amid fears that the German banking giant is being drawn into a money laundering scandal dogging Danish peer Danske Bank, dealers said.
The stock was nearly five percent down in closing trade, after hitting an all-time low at 8.05 euros early in the session.
Investors suspect that a former high-ranking Danske Bank manager meant Deutsche Bank when he told a parliamentary commission in Copenhagen that nearly $150 billion of doubtful transactions had been handled by the US subsidiary of ‘a big European bank’.
Oil prices meanwhile hit multi-month lows on Tuesday, falling more than four percent on the day and now stand some 25 percent lower than their October peaks.
Analysts said Russia’s tepid reaction to a Saudi initiative for producers to cut output was mostly to blame for the day’s drop, with expectations that the US-China trade dispute will cut into demand also weighing the market down. 
Key figures around 1645 GMT
London – FTSE 100: DOWN 0.8 percent at 6,947.92 points (close)
Frankfurt – DAX 30: DOWN 1.6 percent at 11,066.41 (close)
Paris – CAC 40: DOWN 1.2 percent at 4,924.89 (close)
EURO STOXX 50: DOWN 1.4 percent at 3,116.07
New York – Dow: DOWN 1.9 percent at 24,550.67
Tokyo – Nikkei 225: DOWN 1.1 percent at 21,583.12 (close)
Hong Kong – Hang Seng: DOWN 2.0 percent at 25,840.34 (close)
Shanghai – Composite: DOWN 2.1 percent at 2,645.85 (close)
Euro/dollar: DOWN at $1.1395 from $1.1454 at 2200 GMT
Pound/dollar: DOWN at $1.2816 from $1.2854
Dollar/yen: UP at 112.58 yen from 112.55 yen
Oil – Brent Crude: DOWN $2.93 at $66.86 per barrel
Oil – West Texas Intermediate: DOWN $2.70 at $54.50