UPDATE 2-Trade worries plague European shares, FTSE underperforms

  • Reuters
  • Stock Market News
UPDATE 2-Trade worries plague European shares, FTSE underperforms
Credit: © Reuters.

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* STOXX 600 hit lowest since Feb 11

* China vows retaliation to U.S. tariffs

* Strong pound, falling oil prices, ex-div stocks weigh on FTSE

* Carlsberg (CSE: CARLa ), ICA up on upbeat earnings (Updates to close)

By Susan Mathew and Shreyashi Sanyal

Aug 15 (Reuters) - European shares hit six-month lows in a volatile session on Thursday, with London stocks losing more than 1%, as China warned of retaliation against U.S. tariffs, heightening fears of the continued impact of their trade war on global growth.

But the pan-European STOXX 600 index .STOXX made up for some losses after U.S. stock futures turned positive and strong retail sales numbers from the United States subsequently helped Wall Street open higher. .N

The STOXX 600 closed down 0.3%, having fallen as much as 1%earlier in the session to its lowest since Feb. 11.

China on Thursday vowed to counter the latest U.S. tariffs on $300 billion of Chinese goods but called on Washington to meet it halfway on a potential trade deal, as President Donald Trump said any pact would have to be on the United States' terms. said on Wednesday he would strike a trade deal with China only after China found a humane resolution to weeks of protests in Hong Kong. the trade war which is driving markets right now," said Craig Erlam, senior market analyst at Oanda. "The speed in which this trade war has ramped up in the past few weeks is considerable even by its own standards."

"Investors are just very sensitive to anything negative on trade," he said.

Stocks have had a rollercoaster ride over the past two weeks, buffeted by new U.S. tariff threats on China, their subsequent postponement, recession fears, political turmoil in Italy and the unrest in Hong Kong.

If falls were to continue at this pace, Europe's main index could fall beyond May's 5.7% slump which was the most in more than three years.

Weighing on the benchmark index the most on Thursday was a drop automakers .SXAP and commodity stocks .SXPP , the sectors that tend to fall the most during trade uncertainties due to their reliance on exports and demand from China. oil prices pressured oil stocks .SXEP which weighed on London's FTSE 100 .FTSE along with several heavyweight stocks that traded without dividend entitlement. A rally in the pound on strong UK retail sales also added to the FTSE's woes. GBP/

In earnings news, strong numbers from beer maker Carlsberg CARLb.CO and food retailer ICA ICAA.ST pushed shares of both companies to the top of the pan-region index.

Shares in Danish facility services provider Iss ISS.CO were at the bottom, extend losses following quarterly results, with analysts pointing to concerns over free cash flow. in Italy, Austria and Greece were shut for a public holiday.

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