Europe midday: Stocks fall further as trade worries intensify
European stocks had extended losses by midday on Wednesday after US President Donald Trump threatened China with higher tariffs, while US support for protesters in Hong Kong added to concerns about relations between the two nations.
The benchmark Stoxx 600 index was 0.8% lower at 402.13, while Germany's DAX was down 0.9% at 13,102.61 and France's CAC was 0.6% weaker at 5,871.63.
Trump said at a cabinet meeting on Tuesday that he would raise tariffs on China "even higher" if a trade deal between the two countries is not agreed.
Meanwhile, the US Senate's passing of a bill to protect human rights in Hong Kong added to concerns about souring relations between the US and China.
If signed into law, the Hong Kong Human Rights and Democracy Act will demand sanctions on Chinese and Hong Kong officials identified by the US as carrying out alleged human rights abuses. China was quick to condemn the bill, calling on the White House to block it.
Foreign Ministry spokesman Geng Shuang said: "This bill neglects facts and the truth. It applies double standards and it is overt meddling in Hong Kong's affairs and China's internal affairs. This is a serious violation of the international law and fundamental norms regulating international relations. China condemns this and speaks out against this decisively."
He added that China "will be forced to take resolute countermeasure for protectings its national sovereignty".
Chris Beauchamp, chief market analyst at IG, said: "The early gains of Tuesday’s session for European markets are a distant memory, having turned to dust during the afternoon. Today has seen those losses continue, reinforcing the short-term negative view.
"Trade wars may soon be back on the agenda, as the US passes a bill backing the protesters, and the diplomatic spat between the UK and China escalates - a Chinese response via tariffs may not be long in coming, threatening to revive the trade conflict between the US and China as a result. This would likely turn the current weakness into equities into something more substantial, echoing the see-saw moves seen earlier in the year."
In corporate news, shares of German payments company Wirecard slumped after it said that restrictions imposed by Singapore authorities meant the local auditor was unable to conclude its 2017 audit.
B&Q and Castorama owner Kingfisher was sharply lower after it reported a "disappointing" 3.2% fall in third-quarter sales in softer markets as the company's chief executive said it was suffering from "organisational complexity" that ignored customers.
Swedbank was in the red following reports that US authorities are looking into whether its Baltic unit allowed money transfers that violated US sanctions against Russia.