European stocks fell sharply on Friday, tracking their peers in Asia as tensions between the US and China flared over a tit-for-tat shutdown of diplomatic missions.
Beijing said on Friday that it had ordered the US to close its consulate in the southwestern city of Chengdu.
The move follows the Trump administration’s closure of the Chinese consulate in Houston, and came after a speech from US Secretary of State Mike Pompeo indicated that relations between the superpowers had reached a new low.
New figures showed that retail sales rose by 13.9% in June, bringing them more or less into line with where they were prior to the onset of the coronavirus pandemic.
“The ordering of the closure of the US’s Chengdu consulate, along with a ratcheting up of the anti-China rhetoric amongst US policymakers, has prompted further weakness as we come to the end of a week, which saw European stocks push up to their highest levels in almost five months,” said Michael Hewson, the chief market analyst at CMC Markets UK.
The declines in Europe followed steep losses in Asia overnight.
Futures were also pointing to a lower open for US stocks on Friday.
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