Major European equity markets erase gains for the week

European shares ended solidly lower on Friday, with major regional equity markets erasing their gains for the week as uncertainty surrounding U.S. trade policy once again weighed on sentiment and seemed to cloud the economic outlook.

The Stoxx Europe 600 Index fell 0.8% in its second straight daily drop. The day’s decline turned the pan-European index 0.3% lower for the week. For the month, it declined by 2.4% in its weakest monthly performance since March.

Germany’s DAX dropped 1%. For the week, it fell 0.3%, bringing its August decline to 3.5%. France’s CAC 40 fell 1.3%. It lost 0.5% for the week and 1.9% for August. The FTSE 100 fell 1.1%, its third straight daily drop. For the week, the FTSE fell 1.9%, a decline that took it to its lowest close since April. For August, it fell 4.1%, its biggest drop since August 2015.

Italy’s FTSE MIB stock index shed 1.1%. As has recently been the case, the country’s banks were among the biggest drags as investors fretted over the state of the country’s finances.

Bloomberg on Thursday reported that U.S. President Donald Trump wants to move ahead with his plan to place tariffs on $200 billion in additional Chinese imports as early as next week. Companies have until the 6 September to comment on the proposed duties and Trump wants to impose the tariffs once that deadline passes. In the same interview, Trump threatened to withdraw the U.S. from the World Trade Organization.

The tensions added to the geopolitical risk in the market, which is also fretting over Italy and the country’s high debt levels as it prepares a budget that could conflict with EU deficit rules.

The U.K.’s Brexit negotiations also remained in focus following a meeting between EU negotiator Michel Barnier and U.K. Brexit Secretary Dominic Raab, where they claimed progress, but found no agreement on the issue of the Irish border.