Renewed hopes of a US-China trade deal see investors sell gold, while US stocks hit a fresh record.Read more
European markets closed higher this afternoon following another day of investor optimism after the US Federal Reserve yesterday indicated a willingness to reduce the headline interest rate.
That echoed a similar message from the European Central Bank's Mario Draghi who said on Tuesday that the bank was ready to cut the cost of borrowing
And today, the Bank of England said it would keep rates flat at 0.75% but some analysts have said the UK could also be headed for a rate cut.
The pan-Euopean Euro Stoxx 50 closed up 0.4%, or 14 points, at 3,469. That was helped by gains in Germany, where the Dax was also up 0.4% - 47 points - at 12,355 when markets closed. The Cac 40 in Paris gained 0.3%, or 17 points, to finish the day at 5,536.
The FTSE 100 is now down more than 1% at 7,248.20, 85.99 points lower. There are only a handful of stocks trading higher in the index.
Concern about an escalating trade wars is one theory, which has also knocked other European markets.
"Whilst the weaker pound ought to be acting as a catalyst for the FTSE to rally today, the pessimism on trade is outweighing any uplift," said Neil Wilson, chief market analyst at Markets.com.
The pan-European Stoxx index is off 0.8%, while Germany's Dax is down 1.7% and the Cac in France is down 1.6%.
European shares have not been excluded from today's downturn.
In Frankfurt the Dax index is down 1.6%. Steel maker Thyssenkrupp is down more than 7%. Computer chip firm infineon is down more than 4% and Daimler is down by 3.7%.
In Paris the Cac-40 is down 1.5%. Car parts maker Valeo the biggest loser - down by more than 5%.
Stocks on Wall Street have continued to lose ground on Tuesday, and European markets - which were already lower - have fallen further since US trading began.
Worries over an escalation in the US-China trade war have hit sentiment since Donald Trump said he would raise tariffs on Chinese goods later this week.
Late on Monday, US trade representative Robert Lighthizer accused China of backtracking on commitments in trade talks, although he insisted a deal on tariffs was still possible.
In the US, the Dow Jones is now down 1.2% at 26,116.99 while the S&P 500 has fallen 1.3%.
In Europe, the UK's FTSE 100 index is now down 1.5% for the day at 7,267.80, while Germany's Dax index is 1.3% lower at 12,128.06.
Back the PMI data from earlier, which since its release has knocked stock markets across Europe, including Germany's Dax index illustrated above.
David Cheetham, analyst at Xtb, says the economic releases are "worse than expected" and "have sounded the alarm bell not just for the bloc, but also the global economy, by providing further evidence of a worldwide slowdown in economic activity".
"These industry surveys are keenly followed, and unlike employment or GDP figures they are commonly seen as leading indicators due to the nature of their composition which is heavily weighted to future expectations"
The FTSE 100 is now down 54 points - around 0.75% - at 7,300.
Indices across Europe are also lower. In Germany, the Dax is down 0.6% and the French index the Cac is off 0.8% after that PMI data mentioned earlier.
Major stock markets across Europe are trading higher on hopes that the US and China will reach an agreement over trade.
Representatives from the world's two largest economies are holding two days of talks aimed at easing tensions which have seen both nations implement tit-for-tat tariffs on each other's exports.
In London, the FTSE 100 rose by nearly 1% to 6,874.95.
In Germany, the DAX is ahead 0.83% at 10,836.92 while in France, the CAC-40 is up 1.46% at 4,788.15.
Connor Campbell, at analyst at Spreadex, said: "The main driver of this optimism appears to be the ongoing trade talks between the US and China in Beijing.
"Not that there is anything too substantial to justify such positivity, but rather a lack of mood-dampening comments has green-lit an early European rebound."
On Monday evening, US Commerce Secretary Wilbur Ross reckoned that America and China could reach a deal that "we can live with".
Europe's stock markets have come off their earlier highs but are still performing strongly thanks to signs of a thaw in the US-China trade spat.
The FTSE 100 is currently up 118.75 points, or 1.70%, at 7,098.99.
In France, the Cac 40 is 51.02 points, or 1%, higher at 5,054.94, while Germany's Dax is up 247.79 points, or 2.2%, at 11,505.03.
The London market is back at 7,000 after China's manufacturing sector reported its weakest growth in two years on Friday morning.
As world leaders gather in Argentina for the G20 summit, the FTSE 100 slipped 0.8% as shares in miners such as Rio Tinto, Anglo American and Antofagasta slumped.
Connor Campbell of Spreadex says a slowdown in China’s manufacturing sector is not that surprising given the country’s trade war with the US.
"That puts even more pressure on President Xi Jinping to try and move in the right direction with [Donald] Trump in Buenos Aires, something that seems like a huge ask given the latter’s bellicose rhetoric this week."
Eurozone indices have moved in the same direction, with Germany's DAX and the French CAC both down 0.6%.