Stock markets slid yesterday as traders reacted to fading US-China trade deal hopes, renewed unrest in Hong Kong, a stronger pound and political impasse in Spain.

After heavy falls in Asia, Europe headed south with London’s benchmark FTSE 100 index down 0.9 per cent in afternoon trading.

Wall Street also retreated from record highs at the opening bell, with the Dow slipping 0.5 per cent in the first minute of trading.

“Stock markets in Europe are suffering today on account of the unrest in Hong Kong and the creeping concerns about the US-China trade situation,” said David Madden, analyst at traders CMC Markets UK.

The pound was up nearly a percent point versus the dollar, adding further downward pressure to the FTSE 100 that features several multinationals earning in the US unit.

Sterling climbed also against the euro, as official data showed Britain had dodged a recession in the third quarter with growth of 0.3 per cent and the ruling Conservatives of Prime Minister Boris Johnson received a major electoral boost.

In the eurozone, Madrid’s IBEX 35 index was down 0.3 per cent after Socialist premier Pedro Sanchez emerged as winner but weakened from Sunday’s repeat election.

Asian markets, meanwhile, turned sharply lower yesterday as another record close on Wall Street on Friday was overshadowed by uncertainty on the China-US trade talks, while Hong Kong was hit also by fresh protests in which at least one person was shot.