Europe close: Chinese tariffs knock Daimler lower, Italy weighs on periphery

European stocks finished at their session lows as global trade concerns began to bite and as some of the new Italian government's moves triggered selling across the euro area periphery.

German carmaker Daimler said Chinese tariffs on exports from the US would hit sales of its SUVs in the Asian giant, denting full-year profits.

Meanwhile, down in Italy, the new government in Rome named two well-known Eurosceptics, the far-right League's Claudio Borghi and Alberto Bagnai, to head the lower chamber's Budget Committee and the Senate Finance Committee, respectively.

The result was that by the end of trading the benchmark Stoxx 600 was down by 0.90% or 3.44 points to 380.85, alongside a drop of 1.44% or 183.25 points to 12,511.91 for the German Dax.

But at the bottom of the pile out of the Continent's main benchmarks was the FTSE Mibtel, which retreated by 2.02% or 447.47 points to 21,673.11.

At the sector level, the Stoxx 600's Autos&Parts sector gauge fared worst, skidding 3.29% to 575.75. A similar gauge for Oil&Gas shares also weakened, by 0.82% to 336.90.

Italian government bonds also fared worst, pushing the yield on the benchmark 10-year issue up by 18 basis points to 2.73%, although euro/dollar had turned around to trade up by 0.28% to 1.16047.

In the background, overnight China's Commerce Ministry warned that the country stood ready to retaliate against the enactment of any new tariffs by Washington.

There was some unconfirmed 'market chatter' to be heard on Thursday that Beijing might be showing flxibility in talks with Washington in order to avert tariffs, but they did not appear to carry much weight with markets.

Along similar lines, the Journal reported that German carmakers were lobbying for the simultaneous removal of EU (10%) and US (2.5%) car tariffs.

Still in Germany, insurer Allianz fell 1.39% on the back of a report in Manager Magazin - that was denied by the insurer itself - that it was planning to axe at least 5,000 jobs in its home market.

Economic data was again light on the ground on Thursday, with INSEE's business confidence index for France printing at 106.0 for June, unchanged from the month before, while that for manufacturing came in at a reading of 110.0 (consensus: 108.0).

Commenting on the figures, Claus Vistesen at Pantheon Macroeconomics told clients: "The headline manufacturing sentiment index in France was unchanged at 110 in June following an upward revision to the May data, above the consensus, 108.

"The aggregate business confidence index was unchanged at 106 in June, also in line with the consensus."