Europe open: Markets lower after US-China trade talks hiccup

European stocks were lower on Monday morning, as investors eyed trade negotiations between the US and China and digested weak German manufacturing data.

At 0903 BST, the Stoxx 600 was 0.7% lower at 390.39 as Germany's Dax fell by 1.1% to 12,331.58 and the French CAC 40 slipped 0.6% at 5,654.99. Meanwhile, London's FTSE 100 dropped by 0.3% to 7,320.98.

Continental markets followed Asian stocks lower after officials from a Chinese delegation cancelled a planned visit to US farms in Montana, sparking fears that trouble is already emerging in the newly-restarted trade negotiations.

AxiTrader analyst Stephen Innes said markets were lower as the officials were thought to have been ordered to cancel the visit by Beijing following US President Trump's announcement that he would not be interested in a partial deal.

Meanwhile, a newly released report from IHS/Markit showed Germany's manufacturing sector contracted in September, falling short of expectations.

Falling to its lowest levels in more than a decade, the country's manufacturing purchasing managers index (PMI) came in at 41.1, compared to 43.5 the month before and an expected reading of 44.0, while services PMI fell below an expected reading of 54.3 as it came in at 52.5.

Eurozone manufacturing PMI also failed to live up to the hype as it came in at 45.6 for September, down from 47.0 the month before and well below an expected reading of 47.3.

Connor Campbell, market analyst at Spreadex, said: "Once again the eurozone’s flash PMIs gave the region rather severe cause for concern, suggesting the scale of the turnaround needed may go beyond the measures announced by the ECB earlier in the month."

Among individual stocks, holiday and airline operators TUI, Easyjet, Ryanair and Air France were all higher following the collapse of industry rival Thomas Cook, which has gone bust after the failure of last-minute talks.

Commerzbank led the Stoxx 600's fallers after the German bank on Friday unveiled plans to cut 4,300 jobs and close 200 branches as part of a new strategy that would see the company invest heavily in technology.

Other major banks were also lower, with Deutsche Bank, Bank of Ireland and Royal Bank of Scotland all featuring among the top fallers.