Shares in most of Europe dipped further in the red zone early Monday as massive sell-offs around the globe sparked by the US-China trade conflict sent China's currency sinking.
The Pan-European STOXX-600 index was down 2.4% which considering its losses on pre-market Friday, accounted for the largest 2-day decline in over three years as investors got rid of shares and scrambled for safe-havens assets like gold and government bonds.
Traders have been taking refuge to assets like the Japanese yen, bonds, and precious metal, with the Chinese commerce officials letting the yuan sink to 7-per US dollar, its lowest in 11 years. Wall Street wrapped up its worst session so far, Friday.
Global shares have been hounded by shaky trading since U.S. President Donald Trump said he will impose a new 10% tax on China's $300-billion worth of exports to the US, making public his latest move on social media, Friday.
Mining companies BHP and Rio Tinto retreated over 2%, while steelmaker Arcelor Mittal shed more than 5% as the Chinese yuan collapsed, making iron and copper more expensive in the global market. The commodities-linked shares index lost 3% to its lowest in eight months.
The Chinese currency's devaluation early Monday was perceived as a clear signal that Beijing is unfazed by Trump's threat of fresh taxes on its imports, which means the economic discord may get worse. Trump himself labeled China's latest move as a "currency manipulation" and a "major violation".
Wall Street companies suffered a sharp decline early Monday after Beijing's currency measures. The Nasdaq Composite traded over 2.8% lower, while the Dow Jones Industrial Average (DJIA) and the S&P 500 both lost more than 3%.
According to New Vines Capital managing director Andre Bakhos, "today's move puts more pressure on equity markets worldwide because clearly, China is not giving in, it is fighting back... nobody likes this uncertainty."
In a related development, manufacturing figures in the Italian services sector rallied more than estimated last month, but the news was not so rosy for Germany and France. German private-sector output was at its most sluggish in more than 6 years, while PMI figures from France fell back from its peak.
In Britain, growth in the region's thriving services market surprisingly advanced to a 9-month peak last month, although at 51.4, still stands well below its long-run average of 55.
