The value of the City's leading companies has fallen by more than £ 56bn during waves of selling on Asian, European and North American markets.
The FTSE 100 index suffered its biggest percentage since the day after the EU referendum in June 2016 – closing almost 218 points lower at 6,704.
Only one of the 100 companies listed in the FTSE 100 closed up on a day of heavy and coordinated selling on the major global stock market.
Meng Wanzhou, chief global finance officer for the Chinese telecoms company Huawei by Canadian authorities and the request for the defense of cyber espionage and sanction-breaking charges.
Reports of Wanzhou's arrest – and China's demand for the release of 2% in the Shanghai and Tokyo markets overnight and sell-off spreads to Europe, where .
Frankfurt 's DAX index has now fallen by more than 20% since its peak – the official definition of a market – amid concerns that the country' s manufacturing exports will be hard hit by an intensification of US – China protectionism.
Donald Trump and China's premier Xi Jinping at the G20 summit in Buenos Aires appeared to call in a nutshell in their tit-for-tat trade war.
Fears that the US would break the armistice led to an 800-point drop in New York's Dow Jones industrial average on Tuesday for the funeral of former president George HW Bush. The Dow opened 400 points lower and at one point was more than 700 points before rallying.
Andrew Milligan, head of global strategy at Aberdeen Standard, said: "I think I would put it [the sell-off] United States following the G20. Out of the jaws of victory, the White House snatched defeat. "
Shares of the US dollar, as well as heavy losses as investors, in favor of safer assets such as government bonds and gold. The S & P 500 was down by around 2% by lunchtime in New York – leaving it down on the year.
Concerns that Trump will announce an increase from 10% to 25% in tariffs on $ 200bn.
The US Federal Reserve, the United States, has left the world's largest economy on a bankruptcy rate.
The Fed meets this month and is expected to raise interest rates for the fourth period this year.
The mood was also affected by the oil cartel. Oil companies feature heavily on stock markets and make lower profits when the price falls. The cost of a barrel of raw Brent – a bellwether of the market – fell by more than 4%.
Theresa May 's uphill struggle to get an answer to London. The 3.15% fall in the FTSE left at the lowest level in two years.