Europe close: Stocks end lower amid geopolitical tensions

Stock markets across the region slumped as tensions between China and the US flared up again and as the euro added to its recent breakout.

On Wednesday morning, Washington gave Beijing three days to shut its consulate in Houston - the country's fourth largest city - "to protect American intellectual property and Americans’ private information."

But there was much more to it, the day before, US Secretary of State, Mike Pompeo, and Foreign Secretary, Dominic Raab, announced their intention to build a "coalition" that understood the threat from China.

Geopolitical concerns in markets came on top of simmering concerns regarding the need for sustained policy support for the economy given the possibility of a drawn out

By the end of the day, the pan-European Stoxx 600 was down 0.87% at 373.44, alongside a 0.51% dip for the German Dax to 13,104.25 while the FTSE Mibtel was off 0.60% at 20,598.78.

Travel&Leisure stocks were hist hardest, with the Stoxx 600 sub-index down 1.65% alongside a 1.26% drop for the Autos&Parts sector.

Euro/dollar meanwhile was again flying in the background, climbing 0.44% to 1.1578, as the US dollar spot index fell towards technical support at its 52-week lows.

The move came alongside big gains in silver and gold futures, as investors sought ought safe havens, with the former surging by nearly 7% to $22.96/oz.

Front month Brent crude oil futures on the other hand were down 0.32% at $44.18 a barrel on the ICE - despite the retreat in the Greenback.

No major economic releases were scheduled for Wednesday with investors waiting on the latest quarterly results from Microsoft and Tesla which were due out after the close of trading in New York.

"We still have to watch the risk of increasing stress during the second, more drawn out phase of the ongoing tick-shaped recovery," Kallum Pickering at Berenberg said in a research note sent to clients.

"Even if the virus remains under control and major economies avoid renewed national lockdowns, nervous businesses and households may continue to maintain high precautionary cash balances instead of spending with confidence."