Europe open: Stocks start week lower amid US-China diplomatic spat

Stocks on the Continent were trading sharply lower at the start of the week after Washington reiterated its call for China to be more transparent on the events that led up to Covid-19 pandemic and poured scorn on its handling of the crisis and the information provided to the world community.

Over the weekend, the US Secretary of State, Michael Pompeo said there was significant evidence linking the virus to a high-security laboratory in the Chinese city of Hubei and an assessment from the Department of Homeland Security criticised Beijing's crisis response, alleging a lack of transparency.

Commenting on the news-flow out of the US, Josh Mahony at IG told clients: "Markets are back in the red, with Trump’s continued attacks on China raising fears of further trade wars."

Against that backdrop, as of 1100 GMT, the benchmark Stoxx 600 was trading 2.34% lower to 329.49, alongside a 3.14% fall for the German Dax to 10,518.76, while the FTSE Mibtel was down 2.89% at 17,179.57.

In parallel, front month Brent crude oil futures were slipping 2.23% to $25.85 a barrel on the ICE.

Voicing similar concerns, David Madden, senior market analyst at CMC Markets UK, said: "Mr Trump is directing his ire at the authorities in Beijing, and it looks as if he is gearing up for another trade spat. The Donald has a presidential election to contest in November, and it seems that he will be picking a fight with China in a bid to appeal to his voter base."

There was little in terms of fresh economic data for investors to sink their teeth into.

However, IHS Markit's euro area factory sector Purchasing Managers' Index did finish the month of April at 33.4, which was only a tad lower than the preliminary print of 33.6 for the month, although it remained far below the end of March reading of 44.5.

On the pandemic front meanwhile, rates of daily news deaths and infections continued to trend lower over the weekend in France, Spain and Italy.