Europe Markets

European markets close lower as US-China tensions rise over coronavirus

Key Points
  • The pan-European Stoxx 600 provisionally closed down 2.5%.
  • Oil and gas stocks slipped almost 5% to lead losses as all sectors and major bourses slid into negative territory.
  • U.S. President Donald Trump said Sunday that he believed that a "mistake" in China was the cause of the spreading coronavirus pandemic, though he did not present any evidence for the claim.

European stocks closed lower on Monday amid rising U.S.-China tensions around the source of the coronavirus outbreak.

The pan-European Stoxx 600 provisionally closed down 2.5%. Oil and gas stocks slipped almost 5% to lead losses as all sectors and major bourses slid into negative territory.

Activity in the euro zone's manufacturing sector contracted at a record rate in April with Covid-19 related measures impacting heavily on demand and production, a survey showed on Monday. 

IHS Markit's Purchasing Managers' Index (PMI) for manufacturing fell to 33.4 in April from 44.5 in March, with anything under 50 representing a contraction.

European stocks are following the negative trend set by their Asian counterparts Monday where markets traded lower in reaction to rising tensions between Washington and Beijing.

U.S. President Donald Trump said Sunday that he believed that a "mistake" in China was the cause of the spreading coronavirus pandemic, though he did not present any evidence for the claim. Speaking during a Fox News town hall, Trump said, "I think they made a horrible mistake and didn't want to admit it."

The nation's top spy agency said Thursday that it had determined that the virus was not man-made, but was still investigating whether it was caused by "an accident at a laboratory in Wuhan." China has rejected claims that the virus escaped a research center in Wuhan.

In the meantime, the number of coronavirus infections continues to rise with the number of global cases now topping 3.5 million. The virus has caused over 247,000 deaths worldwide. While cases and fatalities continue to decline in Europe and the U.S. now, Latin America and Africa are seeing a growing number of cases, Reuters noted Monday. CNBC's live blog has the latest coronavirus developments.

Biggest movers

In terms of individual share price action, Thyssenkrupp tumbled to the bottom of the European benchmark. The German industrial conglomerate was down more than 13% after reports that management was notifying staff of a cash squeeze due to the coronavirus pandemic.

At the other end of the European benchmark, Britain's Royal Mail bucked the trend, up over 6%.