European shares down on trade worries

European stocks were broadly lower on Wednesday as Chinese manufacturing data disappointed and media reports suggested the Trump administration is considering imposing additional tariffs on Chinese imports. The Federal Reserve’s policy decision also remained in focus, though no change to the fed funds rate is expected.

The Bank of England announces its rate decision on Thursday, with analysts expecting a 25 bps hike despite Brexit gloom.

Meanwhile, Eurozone manufacturing activity remained subdued at the start of the third quarter, as initially estimated, final data from IHS Markit showed. The factory PMI rose to 55.1 in July, in line with flash estimate, from 54.9 in June. Elsewhere, data from IHS Markit and Chartered Institute of Procurement & Supply showed the U.K. manufacturing sector expanded at the slowest pace in three months in July.

The pan-European Stoxx Europe 600 index was down 0.28 percent at 390.50 in late opening deals after rising 0.2 percent on Tuesday. The German DAX was declining 0.4 percent and the U.K.’s FTSE 100 was down over 1 percent while France’s CAC 40 index was little changed with a negative bias.

Japan’s Nikkei share average rose on Wednesday, brushing a 12-day high, buoyed by strong earnings for blue chips such as Sony and Sharp and the yen’s slide to near two-week lows against the dollar.

Weak factory activity data and a U.S. proposal for higher tariffs on $200 billion of Chinese imports weighed on investor appetite for emerging market stocks on Wednesday while a stronger dollar created headwinds for currencies.

MSCI’s benchmark emerging stocks index fell 0.2 percent in early trade after discouraging data out of China set the tone, before recovering to trade flat in European hours.

A private survey showed that Chinese manufacturing grew at the slowest pace in eight months in July as export orders declined in their worst slump since June 2016.