Chinese shares fell amid Europe-US trade tensions

China stocks fell the most in three weeks on Thursday, as investor sentiment soured amid trade tensions between the United States and the European Union and worries over a slowdown in global economic growth.

** The blue-chip CSI300 index fell 2.2 per cent, to 3,997.58, while the Shanghai Composite Index closed down 1.6 per cent at 3,189.96, both logging their biggest single-day drops since March 25. ** In a fresh escalation of trade tensions, U.S. President Donald Trump has threatened new tariffs on goods from the European Union even as the Sino-U.S. trade dispute remains unresolved.

** European Central Bank (ECB) President Mario Draghi raised the prospect of more support for the struggling eurozone economy on Wednesday if its slowdown persisted, saying the central bank had "plenty of instruments" with which to react. ** That came after the International Monetary Fund's warning that the global economy was slowing more than expected and a sharp downturn could require world leaders to coordinate stimulus.

** China's factory-gate inflation picked up for the first time in nine months in March, edging away from the deflationary territory. ** But analysts urged caution, saying it would take a few more months of better data and further policy support from Beijing to see if a recovery can be sustained.

** On the mainland, sectors sank across the board, led by consumer firms which had seen robust gains this year. ** The CSI300 consumer staples index slumped 3.6 per cent, still having gained more than 50 per cent this year.

** For the medium to long term, the A-share market will remain rangebound, and significant corrections could not be ruled out if in particular policy support fails to meet expectations or in case of unfavourable changes in external environments, Shanxi Securities wrote in a report. ** The market calls for the support of fundamentals, while the bottom of corporate earnings is yet to be determined as the economy is still in a downward trend, the brokerage added.

** Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.49 per cent, while Japan's Nikkei index closed up 0.11 per cent. ** At 07:14 GMT, the yuan was quoted at 6.7151 per U.S. dollar, 0.01 per cent firmer than the previous close of 6.7158.

** So far this year, the Shanghai stock index is up 27.9 per cent and the CSI300 has risen 32.8 per cent, while China's H-share index listed in Hong Kong is up 14.9 per cent. Shanghai stocks have risen 3.21 per cent this month. ** As of 07:15 GMT, China's A-shares were trading at a premium of 25.33 per cent over the Hong Kong-listed H-shares.