European stocks at their lowest in more than two weeks

European stocks fell to their lowest levels in more than two weeks on Wednesday as fresh concerns over relations between the US and China emerged. The US Senate has passed a bill that would force the Trump administration to annually re-examine Hong Kong’s special status on Tuesday, infuriating Beijing as protests roil the Asian financial centre.

The president also threatened to raise tariffs on Chinese goods if he is unable to strike a trade deal with Beijing. European markets slipped, as the composite Stoxx Europe 600 declined for a third straight session with a fall of 0.6 per cent.

In London, the FTSE 100 slipped more than 1 per cent, leaving it on track for its worst day of the month. Investors worry the Senate’s actions against China might prevent a trade deal, said UBS’s Paul Donovan. “However, risk market declines have been fairly limited, suggesting that investors’ base case is that a deal will still take place,” he said.

In New York, futures trade pointed to moderate declines at the open, while in Asia there were falls for China’s CSI 300, Hong Kong’s Hang Seng and Japan’s Topix. Later in the US session, investors will weigh the release of the latest minutes from the Federal Reserve’s monetary policy committee.

The minutes “will probably signal that policy is on hold for now, barring a material reassessment in the outlook, per Chair Powell’s recent rhetoric”, said Deutsche Bank’s strategists. “It’ll be interesting to see if the minutes shed any light on what exactly would qualify as a ‘material reassessment’, as well as details on how deep the internal disagreement over the rate cut was.”

An index of developing world stocks is eyeing its smallest monthly gain in three, while a basket tracking their currencies is on track to post a decline after gaining for two months in a row.