European stock markets have tumbled after weak Chinese trade data laid bare the impact of the US-China trade war.
China’s export and import figures fell dramatically in December, going against analysts’ predictions of a rise.
Negotiations between the two nations concluded last week without a resolution, although both sides indicated progress had been made.
The FTSE 100 has fallen 1.1 per cent, while the German DAX slid 0.7 per cent and France’s CAC dropped 0.9 per cent.
Luxury retailers, reliant on the Chinese middle class for sales, were hit hardest with handbag seller Hermes falling 1.7 per cent, Christian Dior tumbling 2.2 per cent and Milan’s Moncler losing 2.9 per cent.
Miners on the FTSE 100 also suffered as China is the one of world’s largest commodities importers.
Chinese exports dropped 4.4 per cent year-on-year to $221bn (£172bn) highlighting the impact of the US-China trade war.
Chinese producers had “front loaded” export orders in recent months to get ahead of the planned rise in US tariffs which were scheduled to be imposed from 1 January before a 90-day ceasefire was agreed.
Total imports also fell 7.6 per cent year-on-year to $164bn, also a ten per cent fall from November.
“A sharp drop in Chinese trade has seen market kick off the week in bearish fashion,” IG analyst Joshua Mahony said.
“A sharp deterioration in both export and imports highlights the kickback following a period of front-loading of Chinese exports, which have now fell the most in two-years,” he added.