(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
May 31 (Reuters) - European shares sank to a more than
three-month low on Friday, led by carmakers Volkswagen
VOWG_p.DE and Fiat Chrysler FCHA.MI after President Donald
Trump opened a new front in global trade tensions by promising
tariffs on Mexican imports.
Trump said all Mexican goods would face a 5% tariff from
June 10 until illegal immigration is stopped, threatening to
disrupt supply chains at a time when investors are again
worrying about the threat of recession.
A worse than expected batch of Chinese data added to the
dour mood, sending the pan-European STOXX 600 .STOXX 0.9%
lower by 0708 GMT. All European sectors were in the red, as investors dumped
stocks in favour of the safety of government bonds and Germany's
DAX .GDAXI , which is particularly vulnerable to trade risks,
dropped 1.3% to a two month low. The European auto .SXAP index fell 2.7%, driven by 3%
falls in both Volkswagen VOWG_p.DE and Fiat Chrysler
FCHA.MI , who have significant exposure to Mexico.
Spanish banks Santander SAN.MC , Sabadell SABE.MC and
Bilbao BBVA.MC , which all have a sizable presence in Mexico,
slid between 3.6% and 1.8%.