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European Shares Fall Amid Renewed US-China Tensions

stockmarkets jan23 22may20 lt

European stocks fell on Friday as U.S.-China tensions escalated and China has decided not to set an economic growth target for 2020 due to the coronavirus pandemic.

After China moved to strengthen control over Hong Kong with new security laws, U.S. President Donald Trump warned that Washington would react "very strongly" if Beijing follows through on its plans.

Critics say that the controversial law will effectively end wide-ranging freedoms including the right to peaceful assembly and free speech that Hong Kong enjoys under the "one country, two systems" mechanism.

The pan European Stoxx 600 dropped 0.8 percent to 337.66 after losing 0.8 percent in the previous session.

The German DAX slid 0.8 percent, France's CAC 40 eased 0.4 percent and the U.K.'s FTSE 100 was down 1.4 percent.

Luxury goods makers that rely on China and Hong Kong for a chunk of sales were among the prominent decliners. LVMH dropped 1.4 percent and Kering gave up 1.5 percent.

Renault fell 1.6 percent. The automaker could disappear if it does not get help very soon to cope with the coronavirus pandemic fallout, France's Finance Minister Bruno Le Maire said.

Asia-exposed HSBC Holdings Plc lost 5 percent and Prudential Plc plunged 7 percent on concerns that Beijing's proposed national security law for Hong Kong could stoke social unrest and erode its appeal as a financial hub.

United Utilities slumped 6 percent after posting a lower net profit for fiscal 2020.

Spectris, a supplier of precision instrumentation and controls, lost 6.6 percent after reporting a 20 percent fall in sales in the first four months of the year.

Luxury fashion house Burberry Group advanced 2.4 percent after the company said there are signs of a rebound in China, the industry's key market.

In economic releases, U.K. retail sales declined at a record pace in April as many stores were temporarily closed to contain the spread of coronavirus, data published by the Office for National Statistics showed.

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