European and Asian stocks follow Wall Street lower on trade war jitters

Asian stock markets followed Wall Street lower on Tuesday amid anxiety the US-Chinese trade war will hurt already slowing global economic growth.

Benchmarks in Shanghai, Tokyo, Hong Kong and Sydney all retreated.

Investor anxiety has been fed by President Donald Trump's threat of new US tariff hikes on Chinese goods, protests in Hong Kong and weaker-than-expected data from India, Argentina and Singapore.

"The global economy is perched precariously, hoping for a positive inflection, but braced for a stumble," said Vishnu Varathan of Mizuho Bank in a report.

The Shanghai Composite Index lost 0.5 percent to 2,801.33, and Tokyo's Nikkei 225 tumbled 1.2 percent to 20,433.65. Hong Kong's Hang Seng fell 1.2 percent to 25,524.86.

Seoul's Kospi lost 0.7 percent to 1,928.80, while Sydney's S&P-ASX 200 was 0.3 percent lower at 6,579.70. Markets in Taiwan, New Zealand and Southeast Asia also retreated.

Investors were rattled by a Chinese government statement Monday saying mostly nonviolent protests in Hong Kong were "beginning to show the sprouts of terrorism" and were an "existential threat" to the population.

Hong Kong's airport, one of the world's busiest, canceled all flights Monday evening after thousands of pro-democracy protesters crowded into its main terminal.

Beijing's use of the term terrorism "triggered a wave of risk aversion across global markets," said Stephen Innes of VM Markets in a report.

On Wall Street, the benchmark Standard & Poor's 500 had its biggest decline in a week while the Dow Jones Industrial Average lost nearly 400 points.

Selling was widespread. Technology companies and banks accounted for a big share of the decline.

Investors sought safety in US government bonds, sending their yields tumbling. 

The price for gold, another traditional safe-haven asset, closed higher.

The S&P 500 lost 1.2 percent to 2,883.09. The Dow fell 1.5 percent, or 389.73 points, to 25,897.71.

The Nasdaq composite dropped 1.2 percent to 7,863.41.

Trump has promised 10 percent tariffs on some $300 billion in Chinese imports that haven't already been hit with tariffs of 25 percent. 

The new tariff would go into effect September 1 and more directly affect US consumers.

Last week, Trump said he'd be "fine" if the US and China don't go ahead with a meeting next month, dampening investors' hopes for a resolution.

European shares also fell on Tuesday, as negative news from around the globe, compelled investors to take refuge in safe harbors like bonds and gold.

The pan-European ST OXX 600 index fell 0.4 percent by 0810 GMT, with European lenders weighing the most on the benchmark.

"It's a number of different things that's weighing on sentiment today, it's a mix of everything," said David Madden, analyst at CMC Markets in London.

"There are just negative stories from every corner of the globe you look at, not independently, but when you piece them together it becomes overtly negative."

Milan-listed shares were down 0.7 percent, hitting their lowest since June as right-wing League leader Matteo Salvini's drive for early elections hit a road bump with parliamentary leaders failing to decide when the Senate should debate his no-confidence motion.

Italian markets had tumbled last week when Salvini pulled his support from the coalition arrangement at the center.

Spanish stocks, particularly banks which have exposure to Latin America, underperformed as investors dumped Argentine assets on worries over the return of populist policies after President Mauricio Macri was trounced in presidential primaries.

Argentina's peso collapsed on Macri's defeat, losing roughly 15 percent of its value to 52.15 per dollar after crumbling to an all-time low of 61.99 earlier on Monday.

Corporate news was light as the second-quarter earnings season draws to a close.

Henkel shares slid 5 percent after the German consumer goods company lowered its full-year outlook for sales and earnings, but German meal-kit delivery firm HelloFresh jumped 7 percent on breaking-even for the first time since its trading debut.

The withdrawal of British food delivery service Deliveroo from the German market sent shares of competitor Delivery Hero higher, while Takeaway.com which owns Delivery Hero's German arm rose 3 percent.

Shares of tour operator TUI rose over 3 percent after it said robust business outweighed problems with the grounding of Boeing's 737 MAX jets in the third quarter and upheld its annual earnings outlook.

Defensive plays such as real estate and telecom were among the few sectors in the black.

Energy and currency

Benchmark US crude lost 13 cents to $54.80 per barrel in electronic trading on the New York Mercantile Exchange. 

The contract gained 43 cents on Monday to close at $54.93. Brent crude, used to price international oils, declined 19 cents to $58.38 per barrel in London. It added 4 cents the previous session to $58.57.

The dollar gained to 105.57 yen from Monday's 105.30 yen. The euro declined to $1.1188 from $1.1214.