European stocks ended lower on Monday as investors were greeted with fresh Sino-US tensions following a May Day break, after Washington threatened tariffs against China over the coronavirus.
The pan-European STOXX 600 closed 2.7% lower in a downbeat start to the month, having risen 6% in April on hopes of major economies re-emerging from virus-related lockdowns. Euro zone shares were down 3.8%.
Sectors sensitive to economic growth, including oil and gas, automakers and banking, were particularly rattled by the possibility of a fresh trade spat between the world's two largest economies.
Germany's ThyssenKrupp plunged 14% to the bottom of the STOXX 600 after its management board told staff in a letter that the pandemic could cause a new financial squeeze despite the sale of its elevator business.
Meanwhile, J.P.Morgan's equity analysts downgraded eurozone stocks to "neutral" from "overweight", saying a tilt towards value stocks such as banks was a drag and policy response to the COVID-19 crisis was weaker.
Germany's DAX fell 3.6%, while France's CAC 40 dropped 4.2% as shares in automakers PSA and Renault retreated on data showing French car registrations slumped by almost 89% in April.
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