European stock market futures are steady after experiencing a sharp selloff on Friday as US-China tensions weighed on investor’s sentiments. Tech companies were among the biggest losers as tech companies have larger stakes in both countries.

European stocks reported the largest one-day loss in a month on Friday and ended the week in the red. The pan-European Stoxx 600 ended 1.7% lower as tech stock plunged 3.8% and major bourses moved into the negative territory.

Investors reacted strongly to the US decision of closing the Chinese consulate in Houston, which it accused of being a hotspot for intellectual property theft. The US authorities claim that the Chinese government is behind hacks and cyber thefts. China denied the allegations and says they will retaliate against US sanctions.

They have also revoked the U.S. consulate general license in the southwestern Chinese city of Chengdu. Australian and Chinese markets slumped following the news of escalating tensions between the two largest economies.

“The fear is that this might only be the start of a re-escalation in tensions between the two superpowers,” Spreadex analyst Connor Campbell said, as President Donald Trump seeks to “distract” from the domestic situation in America ahead of the Presidential election.

On the positive side, Flash Markit PMI rebounded to 54.8 level for the first time since February. The robust growth in the purchasing index suggests a rebound in business activities all over the eurozone. The sharp growth in UK retail sales also indicates that the economy is recovering at a strong pace.

What Does it Mean?

  • Gold soared to new all-time high amid investors move towards safe-haven assets.
  • The US dollar fell at the beginning of the week due to coronavirus spread across the US.
  • Euro surged to fresh 21 months high against the dollar on Friday.
  • US stock futures are in green on Monday.