LONDON: European shares were sharply lower for a second day on Friday as weak Chinese data renewed worries about the health of the world's second-largest economy and potential damage from Washington's protracted trade spat with Beijing.
The euro zone STOXXE index was down 1.1 percent at 1026 GMT with all bourses across the continent in the red.
The carmaker and auto supplier sector was down 1.8 percent, the biggest loser. A drop in European car sales last month also deepened worries about slowing demand following the introduction of tougher new emissions tests.
The technology stocks dropped 1.7 percent.
Germany's DAX, which is particularly sensitive to global trade tensions and the Chinese economy, was the worst performing index amid pressure on retailers, banks and carmakers.
Investors shunned equities after data showed China's November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years as domestic demand softened further.
The data eclipsed hopes that boosted shares this week that trade tensions between Washington and Beijing were easing.
The world's second-largest economy has been losing momentum in recent quarters as a multi-year government campaign to curb shadow lending put increasing financial strains on companies in a blow to production and investment.
"The market's softer after Chinese retail sales. They're still quite stellar growth, they were lower than expected and enough to concern the market," said Edward Park, investment director at Brooks Macdonald.
The data will spur expectations that Beijing will take measures to stimulate economic growth but the "the market appears to be looking for reasons to a sell-off rather than a rally", he said.
Adding to the poor sentiment, the European Central Bank cut forecasts for economic growth and inflation on Thursday. The reduction was modest, but it underscored concerns about a euro-zone slowdown and the bank's caution as it ends its bond-buying scheme and tries to wean the region off stimulus.
European stocks were on track for their worst quarter in more than five years after a broad global sell-off as investors fret about slower growth, tightening fiscal policy and trade tensions.
Chinese data dented European retailers and luxury goods companies, which make a significant portion of their revenue in China. Burberry was down 1.6 percent.
The luxury sector was also in focus after Hennessey, Moet and Louis Vuitton owner LVMH announced plans to buy boutique hotel group Belmond in a deal worth $3.2 billion.
While the deal will shore up its niche hospitality business, analysts questioned whether it will be a significant boost to earnings. The shares were down 1.7 percent.
M&A dominated other headlines too. German online classifieds company Scout24 jumped 10 percent, topping the STOXX 600 leader board after the FT reported it's exploring a sale that could see it taken private in one of the country's largest leveraged buyouts in years.
GVC Holdings hit the jackpot ahead of a UK parliamentary vote on legislation next week that Citi analysts say will remove a risk of a major cash outlay to former Ladbrokes shareholders.
The stock was up 8.8 percent, the top gainer on the FTSE 100.