European markets retreat as U.S.-China tensions weigh

Stocks News

The pan-European Stoxx 600 fell 0.7% in early deals, with banks and financial services dropping 1.1% to lead losses as all sectors and major bourses slid into negative territory.

Market participants are monitoring the latest developments in the U.S.-China technology war. On Monday, President Donald Trump’s administration moved to further tighten restrictions on Huawei by effectively cutting the telecommunications giant off from chips made by foreign firms that have been produced with U.S. software or technology.

Meanwhile, investors are also monitoring U.S. pressure on Bytedance, the Chinese owner of popular social media app TikTok. Last week, President Trump signed an executive order giving the company more time to figure out a sale of its U.S. TikTok business.

Microsoft is currently seen as the frontrunner in the race to buy TikTok’s operations in the U.S., Canada, Australia and New Zealand assets. But that changed late Monday after it emerged that Larry Ellison’s Oracle was also in talks to acquire those units. Ellison is a known supporter of the president.

In earnings news, Pandora shares fell 6.4% in early trade to the bottom of the Stoxx 600 after the Danish jeweler published full-year guidance showing a more substantial earnings drop than expected.

At the top of the European blue chip index, Swiss chemicals company Clariantclimbed 4%.

Norway’s $1 trillion sovereign wealth fund is also reporting second-quarter results.