Europe midday: Stocks dip on trade tensions, German factory orders crash

Stocks are under slight selling pressure at the start of the week, with investor sentiment taking a knock from the headlines around the going trade spat, mainly between China and the US.

"Trade concerns continue to buffet market sentiment, with the US and China taking turns to threaten further tariffs," said Mike van Dulken at Accendo Markets.

Underlining the potential impact of those trade frictions, data published on Monday revealed an unusually sharp - and very much unexpected - 4.0% month-on-month decline in German factory orders for June, with those from outside the single currency bloc shrinking by 5.9%.

Against that backdrop, as of 1330 BST the benchmark Stoxx 600 was dipping by 0.21% or 0.83 points to 388.36, alongside a fall of 0.20% or 26.21 points to 12,589.55.

The FTSE Mibtel meanwhile was down by 0.26% or 57.09 points to 21,529.80.

In parallel, euro/dollar was off by 0.18% to 1.15472 as the Greenback strengthened amid the heightened risk aversion.

At the weekend, the US president claimed his country had gained the upper hand in its trade dispute with the Asian giant, to which China's Global Times responded in a Sunday editorial that Beijing was prepared for a "protracted war" and did not fear incurring in short-term economic costs.

"Considering the unreasonable U.S. demands, a trade war is an act that aims to crush China's economic sovereignty, trying to force China to be a U.S. economic vassal," the Global Times, a tabloid which some observers believe is a pseudo mouthpiece for officials Beijing, said.

Also making itself felt in markets, speaking at the Aspen Institute's 25th Annual Summer Celebration Gala on Saturday, JP Morgan boss, Jamie Dimon, said investors should be prepared to see yield on 10-year US government debt reach 5.0% or more.

On the corporate front, industrial gases firm Linde was in the news after the Federal Trade Commission said it and US rival Praxair may need to sell more assets before their tie-up can be approved.

Also in Germany, Moody's lowered its rating on Deutsche Bank's senior debt from Baa2 to Baa3.