(Reuters) – European shares pulled back from three-week highs on Wednesday after the United States toughened its stance on trade with China and data from Beijing showed factory inflation slowed in May, deepening fears of a global economic slowdown.
President Donald Trump said on Tuesday he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five “major points” which he did not specify.
The pan-regional STOXX 600 index fell 0.45% by 0713 GMT, with the tariff-sensitive technology sector down 0.76%.
Also weighing down the sector was a 1.2% fall in shares of Dassault Systemes after the French technology company agreed to buy Medidata Solutions, a U.S. software company involved in the sphere of clinical trials, in a deal worth $5.8 billion (£4.7 billion).
Trump also took aim at the Federal Reserve, saying interest rates were “way too high”, ahead of a reading on U.S. inflation that could shift the odds for an early cut in rates.
Italy’s FTSEMIB fell 0.38% and its banking index dropped 0.63% after the European Union moved closer to taking disciplinary action over the country’s growing debt.
However, authorities in Rome made tentative steps to avert a procedure that could saddle the country with large fines and alienate investors.
Axel Springer jumped 12.4% after funds controlled by U.S. private equity investor KKR offered 63 euros a share to buy out minority shareholders of the German publisher.
(Reporting by Amy Caren Daniel and Susan Mathew in Bengaluru)