European markets down amid fears of US-China trade war

European markets opened lower on Wednesday amid fears of an escalating global trade war, after China slapped new retaliatory tariffs on US goods. The FTSE100 lost about 10 points in Wednesday’s first deals, before dropping a further 45 points down to 6,979 before midday.

On the continent, the pan-European STOXX 600 index was down 4.29 points, or 1.16 per cent after a flat open. Germany’s DAX dipped 1.56 per cent, while the French CAC lost 50 points, and Spain’s IBEX index dropped 116 points by noon.

Read more: What you need to know before the open

Buoyed by the float of streaming giant Spotify, shares in American tech companies rallied on Tuesday, but the European market continued to show signs of uneasiness. The tech-focused SX8P was down 8 points, or around two percent.

In Asia, stocks were somewhat steadier, with the Nikkei gaining 0.1 to 21,319.55. However share markets in South Korea, Hong Kong and Shanghai dipped slightly in the wake of China’s tariff announcements.

Read more: Wall Street tech stocks slide as investors fear regulatory clampdown

Currencies were also moderately affected, with the euro slipping 0.1 percent versus the dollar to $1.23. The dollar also fell, tumbling 0.4 percent to trade at 106.14 yen, erasing some of the modest gains it had made following the tech rally on Tuesday.

China’s $50bn (£35.61bn) penalties came in retaliation to the Trump administration’s announcement of 25 tariffs on annual imports including industrial technology, transport and medical products. China’s tariffs covered goods ranging from soybeans, cars and chemicals to whisky, cigars and tobacco.