By Sruthi Shankar and Shreyashi Sanyal
(Reuters) – European shares slid to near three-week lows on Thursday after U.S. legislation on Hong Kong added to concerns that a “phase one” trade deal between Washington and Beijing would not be sealed anytime soon.
Trade-sensitive sectors such as miners <.SXPP>, technology and <.SX8P> industrials <.SXNP> were particularly hit hard, with negative updates from Thyssenkrupp and Fiat Chrysler adding to the downbeat mood.
The German conglomerate
Fiat Chrysler
A Reuters report that completion of a “phase one” trade deal could slide into next year raised fears that a fresh round of U.S. tariffs on Chinese goods in December could trigger a global slowdown.
Further adding to woes, U.S President Donald Trump is expected to sign two bills passed by Congress intended to support protesters in Hong Kong.
“Recently, we’ve seen optimism that at one point there will be a trade deal, but the news overnight shows that there is not much certainty to that,” said Elwin de Groot, head of macro strategy at Rabobank.
“These moves are a reflection of some investors increasingly questioning whether there will now be a trade deal at all.”
Hopes that the two sides will be reaching a deal soon and somewhat better-than-expected earnings reports had driven European stocks to a four-year peak earlier this week.
However, the pan-European STOXX 600 index <.STOXX> slid 0.7% to its fourth day of losses, while trade-sensitive shares of Germany <.GDAXI> and France <.FCHI> dropped 0.5% and 0.6%, respectively.
British postal company Royal Mail
French luxury group LVMH
Among a few bright spots was British American Tobacco
British utility Centrica
(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Bernard Orr and Shounak Dasgupta)