UPDATE 2-European shares slide as U.S.-China trade war intensifies

Reuters

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 (There will be no FTSE 100 report on 26 Aug, Monday on account
of a bank holiday in the United Kingdom. Reuters will resume
coverage for London stocks from Tuesday 27 Aug)
    * China unveils retaliatory tariffs on U.S. goods
    * Trump tells U.S. companies to seek alternatives to China
ops
    * Powell says will "act as appropriate" to support growth
    * Peppa Pig-owner Entertainment One surges on Hasbro deal
    * Kloeckner jumps on report of talks with Thyssenkrupp

 (Recasts, adds new comments, updates to close)
    By Agamoni Ghosh
    Aug 23 (Reuters) - European shares fell on Friday after U.S.
President Donald Trump furiously reacted to China's latest
imposition of tariffs on certain U.S. goods, while a lack of
direction in the U.S. central bank's rate outlook somewhat
frustrated investors.   
    In a surprise move Beijing imposed additional tariffs on
thousands of U.S. products effective Sept. 1, infuriating Trump
who hit back asking U.S. companies to start looking for
alternatives to their China operations.  urn:newsml:reuters.com:*:nW1N24C01I
    "Our great American companies are hereby ordered to
immediately start looking for an alternative to China, including
bringing ... your companies HOME and making your products in the
USA," Trump said as part of a series of tweets.  urn:newsml:reuters.com:*:nL2N25J0XP 
    Markets reacted sharply to those developments, with Wall
Street indexes shedding over 1% and the pan-European STOXX 600
 .STOXX  ending 0.7% lower after a volatile session. Germany's
trade-sensitive DAX  .GDAXI  fell 1.2%. 
    Trade-sensitive autos  .SXAP , mining  .SXPP  and tech
stocks  .SX8P  were the biggest losers across Europe, while
defensive real estate stocks  .SX86P  were the only ones in
positive territory. 
    The benchmark index still managed to record its first weekly
gain in four weeks. 
    European equities have seen wild swings in August amid fears
that the economic effects of the U.S.-China trade war could tip
major economies into recession. 
    
    ECONOMIC PAIN 
    "The trade war will only get uglier and cause both sides
more economic pain before we see a final resolution," said
Edward Moya, senior market analyst at OANDA.
    "Trump is going to try to gather as many chips as he can to
try and punish China before settling on a deal that appeases a 
majority ahead of the 2020 U.S. Presidential elections."
    U.S. Federal Reserve Chairman Jerome Powell's latest
comments also came under Trump's attack as the President asked
whether his appointee to the central bank was a greater "enemy"
than China's leader Xi Jinping to the country.  
    Powell, in a much anticipated speech at an economic
symposium at Jackson Hole said the U.S. central bank would "act
as appropriate" to keep the current economic expansion on track,
but did not offer a clear indication on future interest
rate-cuts.  urn:newsml:reuters.com:*:nN9N23A02K
    "His statement wasn't as clear as we hoped it would be, but
it was enough to show that he was at least leaning towards a
rate cut in September," said Philip Marey, senior U.S.
strategist at Rabobank.  
    London's FTSE 100  .FTSE  had its fourth straight week of
losses, the longest streak since February. Oil majors Shell
 RDSa.L  and BP  BP.L  had the biggest negative impact on the
day.  .L 
    Among individual stocks,  Kloeckner & Co  KCOGn.DE  shares
jumped 7% after a newspaper said Thyssenkrupp  TKAG.DE  was in
talks to buy the metals distributor.  urn:newsml:reuters.com:*:nL5N25I5MH 
    Peppa Pig owner Entertainment One  ETO.L  hit a life high
after agreeing to be acquired by Hasbro.  urn:newsml:reuters.com:*:nL4N25J1VW

 (Reporting by Agamoni Ghosh & Amy Caren Daniel in Bengaluru
Editing by Patrick Graham and David Holmes)
 ((Agamoni.Ghosh@thomsonreuters.com; +918067491130))

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