European shares fell on Tuesday as hopes dimmed for a positive result in high-level trade talks between the U.S. and China. The pan-European Stoxx 600 dropped 1 percent, with banks, autos, financial services, travel, and retail stocks plunging more than 1.5 percent as all sectors and major bourses traded in the red. Hopes for significant progress took a hit on Monday after the U.S. Commerce Department blacklisted 28 Chinese companies over alleged involvement in the abuse of ethnic Uighurs in China's Xinjiang province. Tensions between Washington and Beijing were further strained by controversy over a tweet from the general manager of the Houston Rockets in support of pro-democracy protests in Hong Kong, which was rebuked by the National Basketball Association following a furious backlash from mainland China. Chinese state media and Tencent have suspended the broadcast of NBA preseason games in China, while Alibaba shopping sites appear to have de-listed Houston Rockets merchandise in China. Hong Kong chief executive Carrie Lam on Tuesday refused to rule out seeking help from central government to deal with the ongoing mass protests. Back in Europe, the pound fell sharply against the dollar Tuesday morning after several British media outlets reported that Brexit talks between the U.K. and European Union were close to breaking down. Sterling was trading down at around $1.2211 by early afternoon. Hong Kong's stock exchange on Tuesday abandoned its $39 billion bid for the London Stock Exchange Group (LSE) after failing to win over the LSE board. LSE shares were down 5.2 percent in afternoon trade. Data released before the bell on Tuesday showed a surprise increase in German industrial output for August, suggesting Europe's largest economy may avert a recession. Output rose by 0.3 percent on the month against expectations of a 0.1 percent fall. In terms of individual stocks, shares of Electrocomponents climbed 3.5 percent after a strong trading update to lead the Stoxx 600. Germany's Qiagen was down 19.9 percent by the afternoon, slightly coming off its lowest point in three years after third-quarter sales missed expectations and the company announced that its CEO Peer Schatz will step down. Source: CNBC
