European equities fell in early trading on Wednesday due to decline in risk appetite in financial markets after the release of dismal factory reports from major economies on Tuesday.
As of 07:59 GMT, the Euro STOXX 600 fell 1.01 percent to 384.10.
France CAC 40 was 1.27 percent down to 5,526.28. In Germany, DAX descended 1.06 percent to 12,137.55 points. Britain’s FTSE 100 slipped 1.28 percent to 7,266.13, marking the largest decline among in European shares.
Markets were shocked by negative manufacturing data in the United States as industrial activity there contracted to a 10-year low last month at 47.8 points, according to the ISM data.
President of the United States blamed in a tweet on Tuesday the Fed on the dismal factory data, as he said:” As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies; they do not have a clue. Pathetic!”
The sell off started overnight n Wall Street, as the Dow Jones plunged 1.28 percent and the S&P 500 shed 1.2 percent to touch four-week lows.
PMI manufacturing reports from Germany and the UK recorded readings of 41.7 and 48.3 respectively, also indicating further contraction.
In addition to investor concerns, European companies appeared to be in their worst quarterly profit in three years as revenues fell for the first time since early 2018, according to the latest data.
Concerning the Brexit developments, British Prime Minister Boris Johnson is expected to unveil his latest Brexit deal to the EU later today.
In the same context, Conservative party leaders have already warned Brussels that if Europe's leaders fail to integrate with Johnson's proposal, Britain will leave the EU without a deal.
The euro and pound
traded lower against the U.S. dollar at 1.0912 and 1.2245 respectively, ahead
of the U.S. ADM employment report.