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European Stocks End Sharply Lower On Mounting Trade War Jitters

European markets ended sharply lower on Monday amid worries about global growth after China retaliated to the U.S. decision to increase tariffs on about $200 billion worth of Chinese goods.

China has decided to counter U.S. levies by raising tariffs on up to $60 billion worth of U.S. goods and said the increase in tariffs, ranging from 5 to 25%, on 5,140 U.S. products would take effect on June 1st.

Beijing has gone ahead with its comments last week that it would retaliate with "necessary countermeasures" in response to the tariff increase, despite Trump's warning that the situation "will only get worse" if China retaliates.

According to reports, China has invited U.S. officials to Beijing to continue talks this week. Meanwhile, Trump's economic advisor Larry Kudlow said Trump would aim to meet with Xi Jinping at a G-20 meeting in June.

Worries about Brexit added to the woes. The pound fell against its major counterparts after Bank of England Deputy Governor Ben Broadbent cautioned that a prolonged delay to Brexit would damage the long-term economic outlook and asserted that further interest rate hikes would be "gradual."

The pan European Stoxx 600 ended down 1.21%. Among the major markets in Europe, Germany and France ended sharply lower, with their benchmarks DAX and CAC 40 tumbling 1.52% and 1.22%, respectively. The U.K.'s FTSE 100 ended down 0.55% and Switzerland's SMI finished lower by 1.16%.

Among other markets, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkey ended with sharp losses.

Czech Republic, Russia and Ukraine ended modestly lower.

Thyssenkrupp was the biggest loser in the DAX index. The stock plunged more than 8%. Infineon, Continental, BASF, Fresenius, Adidas, Siemens and Deutsche Bank ended lower by 2 to 5%.

Daimler lost nearly 5% on reports that China's BAIC Group is seeking to buy stake of up to 5% in the German automaker.

In France, Valeo and ArcelorMittal plunged more than 5%. STMicroElectronics, Michelin, Kering, Louis Vuitton, Publicis Groupe, Credit Agricole, Peugeot and Renault ended lower by 2 to 5%.

British stocks ITV, Tui, Vodafone Group, Provident Financial, Intu Properties, Glencore and Standard Life shed 3 to 6%.

Shares of Metro Bank declined sharply on equity dilution worries.

In economic news from Europe, Bank of France expects France's domestic product to grow 0.3% in the second quarter, the same rate as registered in the first quarter.

The confidence index in the manufacturing sector dropped to 99 in April from 100 in March. In April, industrial production slowed down. However, business leaders expect output to pick up in May.

In services, the business sentiment indicator came in at 100 in April versus 101 in March. Business leaders forecast activity to grow in May. The business sentiment index in construction slid to 105 in April from 106 in March.

Meanwhile, the composite leading indicator designed to anticipate turning points in economic activity in the Organisation for Economic Co-operation and Development area suggested easing growth momentum in most major economies.

The leading indicator fell slightly to 99.0 in March from 99.1 in February, OECD said Monday.

Easing growth momentum remains the assessment for the United States, Japan, Canada, the United Kingdom and the euro area as a whole, including Germany and Italy.

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