European stocks traded lower on Monday as investors reacted to the recent escalation in the US-China trade war.
The pan-European Stoxx 600 fell about 0.4% in the morning deals, with sectors and major bourses largely in red. European basic resource shares fell by 0.3% in heavy exposure to China.
United Kingdom. markets are closed due to a public holiday.
Sentiment was shaken in last session when China announced plans to introduce additional US $ 75 billion tariffs on US goods, followed by President Donald Trump ordering US companies to find an "alternative" to operating in China.
Trump said his administration would raise existing customs duties on Chinese products at $ 250 billion to 30% from 25% on October 1
Dealers also closely watched the Group of Seven (G-7) Summit in Biarritz, France. The trade shift between the world's two largest economies has clouded the meeting of world leaders, with Trump claiming he "could declare a national crisis" during the case.
France's plans to hit tech giants – including Facebook, Amazon, were also in focus and Google – with a 3% so-called "digital tax", which has drawn Trump's ire. The US leader has threatened to tax French wine in response; European Council President Donald Tusk said this weekend that Brussels would "respond in kind" if Washington imposes tariffs on France over the tax.
When it comes to data, investors will look out for German business sentiment figures from Munich's Ifo Institute. There are fears that Germany may be heading for a recession after Gross Domestic Product (GDP) shrank by 0.1% in the second quarter. A recession is typically marked two consecutive quarters of contraction, as well as a general decline in economic activity.
Looking at individual stocks, Germany's Deutsche Wohnen fell by 3% after reports of details of a planned rental cap in Berlin. IT consultant Sopra Steria was another stock trading with 2.6% lower shares.