European stock markets were mired in red on Wednesday, as traders fretted over the fallout from a potential global trade war after the US said it plans to hit Chinese goods with another $200 billion in tariffs.
The Stoxx Europe 600 index slumped 1.2% to 381.81, on course for its biggest one-day percentage loss since June 25, MarketWatch reported.
Britain’s FTSE 100 index slid 1.4% to 7,584.00, while France’s CAC 40 index dropped 1.1% to 5,376.72. Germany’s DAX 30 index lost 1.2% to 12,454.48.
The euro fell to $1.170 from $1.174 late Tuesday in New York. The pound traded at $1.324, down from $1.327 on Tuesday.
Traders headed for the exit as trade-war fears again entered center stage.
All European sectors were in negative territory, with those most exposed to action on tariffs taking the most points off the STOXX. Basic resources was down 3.1% and autos down 1.7%.
With the earnings season about to get into gear, trading updates put individual stocks into focus, Reuters reported.
Shares in Indivior plunged almost a third after the drugmaker said its 2018 profit would come in below its forecast, hurt by the launch of generic versions of its bestselling opioid addiction treatment in the United States.
Micro Focus was another large faller, down 7.5% after the software company gave a half-year update, with analysts at Investec saying that they still see “material challenges ahead for the business”.
Micro Focus’ shares are down more than 52% this year.
Shares in Burberry were down 3.7% after the luxury retailer’s first quarter update failed to impress investors, with no outlook hike.
The White House late Tuesday said it would assess 10% tariffs on a further $200 billion in Chinese goods, a move seen as deepening the rift with Beijing and sending a message to other trading partners that the US won’t back down in a trade fight.
The US last week hit Beijing with levies on $34 billion in goods, and Beijing retaliated with tariffs of the same amount.
A final decision on the products to be hit with the new tariffs is expected after a consultation period in late August.
China’s Ministry of Commerce said in a statement that the new levies are “totally unacceptable” and that the behavior is hurting not just China, but the whole world.
