(Reuters) – European shares fell from their highest level in a month on Thursday, as growing tension between the United States and China dampened hopes for a rapid recovery in the global economy, while investors awaited the outcome of the European Central Bank meeting.
The pan-European STOXX 600 index fell 0.7 percent by 0717 GMT, after closing at the highest level in five weeks in the previous session.
A group of weak earnings reports also boosted the decline, as Dutch beer brewery Heineken fell 4.9 percent, and Richemont Luxury Goods fell 5 percent as sales of the two companies were hit by public isolation measures targeting the Corona virus.
The escalation of tension between Beijing and Washington over trade, technology and geopolitical issues overshadowed data showing that China’s economy resumed growth in the second quarter after a retreat caused by the Corona virus.
All eyes are on the European Central Bank, which is scheduled to announce its monetary policy decision by 1145 GMT, but the bank will surely keep its policy unchanged after a series of exceptional steps.
German fashion retailer Zalando rose 2.8 percent, raising its profit outlook for a full year.