(Reuters) – European shares pulled back from near-record highs on Thursday, as U.S. President Donald Trump signed into law a bill backing protesters in Hong Kong, sparking doubts about the resolution to a prolonged tariff war between Washington and Beijing.
The law, which warns of sanctions against human rights violations in Asia’s financial hub amid pro-democracy protests, drew a sharp rebuke from China for what it views as U.S. interference in an internal matter.
The diplomatic standoff threatens to derail negotiations on a trade truce between the world’s top two economies. Investors had turned optimistic that at least a partial trade deal would be signed by the end of the year.
Shares of trade-sensitive auto parts makers <.SXAP> and tech firms <.SX8P> led declines on the pan-European STOXX 600 index. The benchmark index <.STOXX> was down 0.3% by 0806 GMT.
In a bright spot, Virgin Money UK Plc
Focus now shifts to a raft of economic indicators, including euro zone consumer confidence data and preliminary November inflation figures from Germany, due later in the day.
(This story corrects typo in headline)
(Reporting by Sagarika Jaisinghani in Bengaluru; editing by Uttaresh.V)