Fundamental Comment

European shares widen losses on renewed trade tensions

European shares drop

European shares traded in red on Tuesday amid fading hopes of a US-China trade deal after the latest threats from President Donald Trump to hike tariffs on Chinese goods.

The Euro STOXX 600 shed 0.6 percent to 384.54 after hitting a low of 384.17 on Monday, the lowest level since April 2.

Britain’s FTSE 100 index led the losses with a 1.08 percent plunge to a one-month low of 7,301.21 points.

Germany’s DAX 30 shaved 0.72 percent, France CAC plummeted 0.78 percent and Italy’s edged 0.06 lower.

Global shares were hardly hit on Monday after Trump’s threat to raise tariffs on $200 billion of Chinese goods by 25 percent at the end of the week unless China changes its behavior during negotiations.

“Over the course of the last week or so we have seen an erosion in commitments by China. That in our view is unacceptable,” U.S. Trade Representative Robert Lighthizer said.

Tariffs won’t resolve any problems in the ongoing bilateral trade dispute between China and the United States, China’s foreign ministry replied on Tuesday.

However, there are still glimmer of hopes that both sides could break the impasse during Chinese vice-president Liu He visit to Washington later in the week.

IMF head Christine Lagarde said that tensions between the United States and China are the threat to the global economy, while also warned that Donald Trump’s threat to hike Chinese tariffs are an ‘unfavorable’ development.

The euro traded lower for the first time in three sessions at $1.1183, and the British pound slipped to $1.3060.

A report released today from Germany showed that factory orders were 0.6 percent up in March, but came short of analysts expectations of 1.6 percent soar.

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