US-China trade war concerns and profit taking send stocks lower

Global stock markets eased back on Thursday as concerns about trade wars nibbled at investor confidence and bond yields rose.

"Nerves before US-China trade talks and a little reverberation from yesterday's meeting of the Federal Reserve have kept markets on edge," said market analyst Jasper Lawler at London Capital Group.

"As equities fell out of favor, bond yields rose," he added.

The main indices in London and Paris shed 0.5 percent, while Frankfurt closed down 0.9 percent.

Meanwhile on Wall Street, the Dow was down 1.4 percent in midday trading.

CMC Markets UK analyst David Madden said there was also some profit taking.

"Some major European indices hit their highest levels since February yesterday, and investors are now locking in some profits," he said in a note to clients.

"Traders took their cues from Asia overnight and decided to exit the equity markets, partially driven by higher yields on government bonds," he added.

The yield on the 10-year US government bond briefly moving above 3.0 percent last week also caused many investors to reconsider their portfolios. Many investors consider rates of return above 3.0 percent on safe government bonds as sufficiently attractive to lessen their exposure to risky stocks.

The tariff spat between the world's two biggest economies returned to the fore as a US delegation -- including Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross -- sit with Chinese officials in Beijing, with both sides reducing expectations of a quick resolution.

SS