(Reuters) - European shares fell on Friday as a deterioration in U.S.-China ties compounded fears of a slower recovery from the economic damage wreaked by the COVID-19 pandemic.
Beijing on Thursday planned to impose a new security law in Hong Kong, drawing a warning from U.S. President Donald Trump that Washington would react "very strongly".
The pan-European STOXX 600 (STOXX) was down 1.6% by 0716 GMT, with Asia-exposed stocks such as HSBC Holdings Plc (L:HSBA) tumbling 5.5% and Prudential Plc (L:PRU) falling 8.4%.
UK's FTSE 100 (FTSE) lagged its European peers with a 2% drop.
Luxury goods makers including LVMH (PA:LVMH) and Kering SA (PA:PRTP), who draw a major part of their revenue from China, fell more than 2%.
Shares in France's Renault SA (PA:RENA) slid 4.3% after Finance Minister Bruno Le Maire said he had not signed off on a 5 billion euros ($5.47 billion) state-guaranteed loan to help the company cope with the pandemic fallout.