DAX Tumbles Amid Escalating US-China Tensions
(RTTNews) - German stocks fell sharply on Friday as a sharp escalation in Sino-U.S. tensions dented demand for riskier assets.
Just days after the U.S. government ordered China to close its consulate in Houston, Texas, China announced the closure of the U.S. consulate in Chengdu, saying it was a "legitimate and necessary response to the unreasonable actions of the United States."
On the positive side, the euro area private sector grew at the fastest pace in just over two years in July due to the relaxation of the coronavirus containment measures, flash survey data from IHS Markit showed.
The composite output index rose to a 25-month high of 54.8 from 48.5 in June. This was above economists' forecast of 51.1.
The improvement in part reflected a technical rebound from recent lockdowns, as businesses and their customers increasingly returned to work following the further relaxation of Covid-19 containment measures across the region.
The flash services Purchasing Managers' Index advanced to 55.1 from 48.3 in June, while the flash manufacturing PMI came in at 51.1 versus 47.4 in June.
The benchmark DAX slumped 257 points, or nearly 2 percent, to 12,845 after finishing marginally lower the previous day.
Technology stocks followed their U.S. peers lower, with SAP, Infineon Technologies and Dialog Semiconductor losing 4-6 percent.
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