Europe Markets: European stocks drift lower on China worries and LSE stumbles

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The London Stock Exchange fell as deal talks ended.

Banks felt the pain as European stocks drifted lower on Tuesday, as worries over U.S.-China trade talks continued to weigh on sentiment.

The Stoxx Europe 600 SXXP, -0.54%  declined 0.34% to 381.61, with banks including Banco Santander SAN, -1.50%   and BBVA BBVA, -1.74%  losing ground.

The German DAX DAX, -0.66%  weakened 0.36% to 12054.38, the French CAC 40 PX1, -0.60%  dropped 0.39% to 5500.02 while the U.K. FTSE 100 UKX, -0.03%  increased 0.01% to 7198.28.

The U.S. on Monday announced a blacklist of a group of Chinese tech companies that develop facial recognition and other artificial intelligence technology that the U.S. says is being used to repress China’s Muslim minority groups.

“Ahead of Thursday’s U.S.-China trade talks, the timing of this may worry investors, as reducing the chances of even a partial trade deal,” said Paul Donovan, a UBS economist.

The U.S.-China trade war has had a negative impact on Europe, particularly export-oriented countries like Germany.

After a 95-point drop for the Dow industrials DJIA, -0.36%   on Monday, U.S. stock futures ES00, -0.33%  were weaker.

Of stocks in the spotlight, Qiagen QIA, -20.38%  shares stumbled 20% as the diagnostics firm warned on third-quarter sales, announced the suspension of some development activities, said its CEO was leaving and announced a charge of as much as $265 million.

“There is much for the market to digest this morning and the shares will be in for a bumpy ride,” said Scott Bardo, an analyst at Berenberg who nonetheless says the firm is a buy. Bardo says it will either regroup or be acquired by a rival.

London Stock Exchange Group LSE, -4.99%  shares stumbled 6% after Hong Kong Exchanges & Clearing 388, +2.30%  ended its attempts to buy the LSE. It now needs to wait six months if it wants to bid again. The LSE had said it was opposed to the offer.

EasyJet EZJ, -7.68%  shares ran into profit taking, falling 5%, after announcing full-year profits would be at the top end of expectations, second-half revenue per seat would be above guidance and fiscal first-quarter bookings were in line with last year.