European stocks close lower after US and China take tough trade stances


European stocks traded lower Wednesday after the U.S. and China resumed tough stances in their ongoing trade war.

The pan-European Stoxx 600 was down 0.26% during the session, oil and gas stocks leading losses with a 2.1% decline, while banks fell 1.1%. Media stocks were the strongest performer with a 0.7% gain.

U.S. President Donald Trump on Tuesday defended the use of tariffs as part of his trade strategy, while China vowed a tough response if Washington insists on escalating trade tensions as the world’s two largest economies attempt to negotiate a deal.

Asian stocks slid Wednesday after Wall Street ended a 6-day winning streak overnight, with China’s consumer price index rising 2.7% year-on-year. Hong Kong’s Hang Seng index led losses with a 1.59% drop by the afternoon as protests continued over the contentious Chinese extradition law.

Back in Europe, both Mario Draghi, the president of the European Central Bank (ECB) and Christine Lagarde, the managing director of the International Monetary Fund (IMF) warned about the global trade dispute Wednesday.

In the U.K., Sterling edged towards a three-week high Wednesday as the main opposition Labour party announced plans to introduce parliamentary legislation to block the country exiting the European Union without a deal in place.

In corporate news, French technology giant Dassault Systemes has agreed to acquire Medidata Solutions in an all-cash deal worth $5.8 billion on an enterprise value basis. Dassault shares fell 1.1%.

Senior lawmaker Nicky Morgan, chair of the Treasury Select Committee, requested information from influential British stockbroker Hargreaves Lansdown about its links to the Woodford Equity Income fund, which was suspended last week amid a raft of bad stock calls and investor withdrawals.

Shares of German publisher Axel Springer soared 11.5% after U.S. private equity firm KKR offered to buy out its minority shareholders.

At the other end of the European blue chip index, British American Tobacco (BAT) saw its shares fall almost 4% after warning on Wednesday of steeper declines in global cigarette sales.