European stocks hit by US-China tensions

European shares fell on Thursday, as signs of worsening US-China relations added to concerns over the pace of recovery from the coronavirus-led economic downturn.

The pan-European STOXX 600 ended 0.8% lower in a volatile session, with trade-sensitive German and French indexes falling more than 1% each.

Ties between China and the United States have soured as Washington accused Beijing of mishandling the coronavirus outbreak, stalling a market recovery in recent weeks.

US Secretary of State Mike Pompeo took fresh aim at China on Wednesday, calling the $2 billion it has pledged to fight the pandemic "paltry". A Beijing official said China will not flinch in the face of rising tensions.

Stock markets globally have made headway this week, with optimism over easing of lockdowns and talks of more stimulus for the battered euro zone pushing the STOXX 600 to its strongest close in three weeks on Wednesday.

However, banks, oil & gas and technology companies were the biggest drags on the index on Thursday as risk appetite took a hit.

Amsterdam-based telecoms and cable group Altice Europe NV slumped 13.8% after posting a worse-than-expected first-quarter core profit.

Premier Inn owner Whitbread Plc tumbled 13.4% after it said it would seek 1.01 billion pounds ($1.2 billion) in fresh cash from shareholders to help weather the COVID-19 crisis.

Airline stocks found relief as Lufthansa rose 2.7% amid talks with the German government over a rescue deal worth up to 9 billion euros ($9.9 billion), including the state taking a 20% stake. British low-cost airline easyJet gained 4.4% after saying it would restart a small number of flights on June 15.