Poor PMI data leads European shares lower

European shares dipped on Tuesday as weak factory activity data from across the euro zone spurred fears of an economic slowdown, overturning early gains due to signs the United States was not seeking another radical escalation of its trade war with China.

The pan-European STOXX 600 index had touched a two-month high after opening, tracking gains in Asia and on Wall Street after trade adviser Peter Navarro dismissed reports the White House could seek to force Chinese companies to delist from U.S. exchanges.

The release of IHS Markit’s surveys of manufacturing sector purchasing managers (PMI) for September soured the mood and pushed the main index 0.1% into the red.

The STOXX 600 gained around 2% in the third-quarter compared to 12% in the first three months of this year, as the U.S.-China trade war worsened economic prospects and slowed a global stocks rally that dates back almost a decade.

Asian share prices ticked up on Tuesday as some investors clung to hopes the fourth quarter will bring progress in resolving the United-States trade war that’s cast a shadow over the global economy.

Starting on Tuesday, Chinese markets are shut for a week to mark 70 years since the founding of the People’s Republic of China.

White House trade adviser Peter Navarro dismissed reports that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges as “fake news”, giving short-term players an excuse to buy back risk assets.

Gold fell to a two-month low on the back of a robust U.S. dollar, last trading at $1,468.50 per ounce.

Oil prices rebounded in early Asian trade on Tuesday after production at the world’s largest oil producers fell in the third quarter, although demand concerns continued to keep a lid on prices. U.S. West Texas Intermediate (WTI) crude fell 3.3% on Monday before rise 0.39% early on Tuesday to $54.28 per barrel.