Europe open: Markets drop after Trump signs HK bill
European stocks were lower on Thursday morning as investors feared a new law passed in Washington could scupper progress made in trade negotiations with Beijing.
At 0854 GMT, the Stoxx 600 was 0.1% lower at 409.27, as Germany's Dax fell by 0.3% to 13,245.23 and the French CAC 40 dropped by 0.2% to 5,912.99. Meanwhile, London's FTSE 100 was 0.4% lower at 7,398.56.
Donald Trump signed the Hong Kong Human Rights and Democracy Act into law on Wednesday, a bill that mandates an annual review of Chinese interference in the former British colony and is widely seen as being supportive of pro-democracy demonstrators.
The Chinese ministry of foreign affairs responded by accusing the US of having "sinister intentions", before warning that the new law would "only make the Chinese people more united and make the American plot doomed to fail".
Markets.com analyst Neil Wilson said: "At such a delicate moment for trade talks this could tip the balance against agreement. To rob a phrase, Trump seems apt to bring discord where there was harmony. China has promised countermeasures. It’s interesting how economic disagreements are being politicised.
"We’ve seen how Trump has used tariffs as a diplomatic tool - this move, albeit in reverse, is in this vein."
Among individual stocks, Telefonica climbed after the Spanish company announced plans to split out part of its Latin American business as part of a strategy to generate more than €2bn a year in extra revenues by 2022.
French spirits maker Remy Cointreau spilled lower after its first half operating profits declined, missing expectations.
Lufthansa was also in the red after US aviation authorities proposed a $6.4m civil penalty against the German airline due to accusations that it made hundreds of unapproved flights in the country.