Yahoo Finance US-China trade war fears push European markets to seven-week low
European markets fell to a seven-week low as investors waxed caution in the first trading since the US hiked tariffs from 10% to 25% on $200bn-worth of Chinese imports.
The STOXX 600 index fell 0.5% in early trading. Germany's DAX (^GDAXI) bore the worst of the losses, down nearly 0.7% while Britain’s FTSE 100 (^FTSE) edged lower by 0.1%. France’s CAC (^FCHI) was broadly flat 1140am local time.
Investor sentiment followed Asia’s suit. China's benchmark Shanghai Composite (000001.SS) closed down 1.2% and Japan's Nikkei 225 (^N225) was down by 0.7%. The yuan also fell to a four-month low against the dollar.
Hong Kong's Hang Seng index (^HSI) bucked the trend by ending 0.8% higher, but is still down more than 5.3% on a fortnight ago before US president Donald Trump ratcheted up tariffs on Chinese goods.
US futures were also pointing to a sharp drop for Monday’s opening, with the Dow futures down more than 200-points.
“The US sharply hiking tariffs on Chinese imports and China threatening to retaliate has thrown into doubt the possibility of the two sides reaching a deal after almost a year of talks,” said Jasper Lawler, head of Research at LCG.
“The base scenarios is that a deal will still be achieved, it is just going to take a lot longer than the market had been pricing in over recent months.”
Daimler drags DAX lower
The DAX was also pulled lower when shares in major automaker Daimler fell 2.8% on a report by Reuters over the weekend that China’s BAIC Group were looking to buy a stake in the group of up to 5%.
Vodafone down amid dividend rumours
The telecoms sector took a hit and Vodafone dived 3.4% to the bottom of the main index after reports dividends could fall over the weekend.
It was reported in the The Times that dividend payments was set to be slashed to pay for auctions for mobile phone airwaves in Germany and Italy.
Metro Bank tumbles as customer take fright
Metro Bank took a big hit and tumbled 7% as false rumours circulated on social media about the group on the weekend which advised people too withdraw their money. A major accounting error first disclosed in January has seen its share plummet by more than 70%.
The bank had miss-categorised a large number of commercial property and professional buy-to-let loans, according to regulators, which accounted for £15.2bn of its total loan book.
The embattled lender has been looking to raise £350m in fresh capital and Sky News has revealed the final discussions with existing shareholders and new investors will be unveiled this week.
