European shares slip as U.S.-China tensions, poor earnings weigh

A batch of poor earnings reports also added to the declines, with Dutch beer maker Heineken NV sliding 4.9% and luxury goods group Richemont dropping 5.0% as their sales took a hit from the coronavirus lockdowns. Beijing's heightened tensions with Washington on trade, technology and geopolitics overshadowed data showing China's economy returned to growth in the second quarter after a coronavirus-inflicted slump.

European shares eased from one-month highs on Thursday, as growing friction in U.S.-China relations put a dampener on hopes of a swift global recovery, while investors waited to hear from the European Central Bank.

The pan-European STOXX 600 fell 0.7% by 0717 GMT after closing at a five-week high in the previous session. A batch of poor earnings reports also added to the declines, with Dutch beer maker Heineken NV sliding 4.9% and luxury goods group Richemont dropping 5.0% as their sales took a hit from the coronavirus lockdowns.

Beijing's heightened tensions with Washington on trade, technology, and geopolitics overshadowed data showing China's economy returned to growth in the second quarter after a coronavirus-inflicted slump. Focus turns to the European Central Bank, which is set to deliver its monetary decision at 1145 GMT, but the bank is all but certain to keep policy on hold after a series of extraordinary moves.

In a bright spot, Sweden's Getinge AB gained 3.8% as a surge in demand for ventilators and other life support equipment in the wake of the pandemic lifted its quarterly core profit. German online fashion retailer Zalando SE rose 2.8% as it increased its full-year earnings forecast.