European markets trade lower amid emerging markets sell-off

Stocks in Europe traded slightly lower on Thursday amid ongoing concerns over emerging markets and potential new U.S. tariffs on China.

The pan-European Stoxx 600 is down 0.36 percent lower with almost every sector in the red. The benchmark has hit its lowest level in almost five months. Basic resources was the worst-performing group of stocks, down 1.4 percent, on trade concerns.

Such concerns also influenced the share price of BHP Billiton. The stock fell 4 percent in early deals.

Furthermore, Weir Group tumbled nearly 7 percent after reporting a weakening in demand for original equipment.

On the other hand, shares of energy providers rose during early deals. This followed news that the U.K.’s energy regulator, Ofgem, has set the level of a proposed price cap, which is expected to save about $1.29 billion to consumers, Reuters reported. Centrica led the gains across Europe, up by 4 percent.

In the corporate world, Commerzbank will be replaced in the DAX by a tech firm from September 24 onwards, according to Reuters. Meanwhile, U.K. housebuilder Bovis Homes said that full-year profits will come at the top end of expectations.

Overall, investors are questioning the future of certain emerging markets, including Argentina. Officials in Buenos Aires said Wednesday that they are confident about a new deal with the International Monetary Fund. Overnight on Wall Street, tech stocks dominated the headlines after a sharp sell-off on the back of the testimonies from Twitter and Facebook to the U.S. Congress.

Back in Europe, Brexit remains a concern, following comments from the German government that it is ready for all scenarios, including a no-deal. Meanwhile, the FT has reported that the U.K. will test a new scheme to hire non-EU agricultural workers to ensure that British farmers will not face problems after Brexit.

On the data front, markets are expecting a monetary policy decision from the Swedish central bank at 8:30 a.m. London time and unemployment numbers out in the U.K. at 10 a.m. London time.