European Shares Drop Amid US-Chinese Tensions and Covid-19 Cases

European stocks fell on Tuesday, August 18, as investors feared the escalation of US-Chinese tensions and the return of Coronavirus cases, which affected shares of companies sensitive to the economic cycle.

The European Stoxx600 index fell 0.5% at 07:13 GMT, as banking, energy, insurance and auto stocks fell between 0.8 and 0.9%.

Asian stocks made limited gains after the Trump administration said it would tighten restrictions on Chinese Huawei technologies, aiming to restrict the supply of chips to it, amid an escalation of tensions with Beijing.

Shares in BHB mining group, listed in London, fell 2.2% as it announced a 4% decline in annual profits, in results worse than analysts’ estimates. The company has warned that major economies except China will suffer from a recession due to the Corona virus this year.

Danish jewelery maker Pandora plunged 5.9% after it said the number of closed stores increased slightly in August, and that the level of visiting its stores was “much lower” than before the closings.

British Marks & Spencer shares rose 1.8% after it unveiled a new plan to cut 7,000 jobs, in the latest blow to the retail sector distressed by the Covid-19 crisis.