European stocks close lower after US-China trade tensions escalate

  • U.S. tariffs on $16 billion worth of Chinese imports took effect on Thursday.
  • Chancellor Angela Merkel is reportedly seeking to get a German official at the helm of the European Commission.
  • The U.K. government released advice on "how to prepare" in case of a "no deal" Brexit.

Stocks in Europe hovered around the flat-line before closing lower on Thursday after Beijing implemented new retaliatory tariffs against the United States.

The pan-European Stoxx 600 closed the day provisionally lower by 0.16 percent. Tech stocks were the outperformers, continuing the momentum seen on Wall Street. Basic resources and autos fell on the back of renewed trade tensions.

A new round of U.S. tariffs on $16 billion worth of Chinese imports kicked in on Thursday, prompting Beijing to retaliate with its own levies on American goods worth the same amount.

Looking across the European benchmark, Sunrise Communications was the top performer, ending up 7.25 percent, after reporting second-quarter results and raising its outlook for the year.

Ryanair shares jumped 5.48 percent Thursday. This was after the Irish pilots union Forsa said that an agreement had been reached with the company after a 22-hour session of talks. The dispute centered around issues such as base transfers, promotions and annual leave.

Stateside, stocks continued to reflect uncertainty among investors, moving lower as concerns over legal troubles affecting two of President Donald Trump's key allies weighed on sentiment.

Leading central bankers are meeting at a symposium in Jackson Hole, Wyoming, to discuss the future of monetary policy. Fed Chair Jerome Powell will address attendees in a speech on Friday.

In politics, Chancellor Angela Merkel is reportedly seeking to get a German official at the helm of the European Commission — meaning she will not back her central bank governor, Jens Weidmann, to become the next president of the European Central Bank, Handelsblatt reported.

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And in the U.K., newly appointed Brexit Secretary Dominic Raab released advice on "how to prepare" in case the country leaves the European Union without a deal. Businesses were warned to prepare for increased trade barriers, and consumers cautioned over higher credit card charges when purchasing EU products in the event of a "no deal" Brexit.

French business activity saw a four-month high in August. The IHS Markit Index rose to 55.1 from 54.4 in the previous month. Elsewhere, business activity in the euro zone edged higher in August, but concerns over trade tensions hold back some manufacturers.

The European Central Bank published minutes from a meeting of policymakers in July 26 on Thursday. ECB rate-setters highlighted protectionism and global trade tensions as the biggest risks to the euro area.