European stock markets dived almost 3 percent to log their worst day since last December on Wednesday as the threat of a transatlantic trade war and dismal economic data added to fears about a faltering global economy.
Losses in London were the most dramatic, with the FTSE 100 seeing its worst session in 3-1/2 years after Prime Minister Boris Johnson unveiled a final Brexit proposal that dimmed the chances of Britain leaving the European Union with a deal.
In Europe, Airbus dropped 2 percent and the benchmark STOXX 600 index gave up almost all of the past month’s gains after the World Trade Organization approved US moves to slap import tariffs on $7.5 billion worth of European goods.
Global equity markets are already reeling from a prolonged tit-for-tat battle between Washington and Beijing over trade, which has showed up this week in sharp falls in manufacturing sector indicators on both sides of the Atlantic.
“We haven’t seen the worst of the trade war impact yet and of course it’s a big impact on (manufacturing in) Europe because it relies so much more on exports than US,” said Andrea Cicione, head of strategy at TS Lombard.
The losses drove the pan-European index below its 100-day moving average, seen as a strong technical support level that could spur further losses.
All of Europe’s major markets tumbled more than 2 percent, with Italian shares losing 2.9 percent in their worst session since December, while French stocks gave up a full 3 percent. – Reuters