LIVE MARKETS-STOXX 600 turns lower, China retaliates again

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STOXX 600 TURNS LOWER, CHINA RETALIATES AGAIN

Europe's STOXX 600 .STOXX opened higher but slowly reversed course through the early part of the European morning, taking another leg lower after China upped the ante in its trade war with the U.S. by slapping additional tariffs on U.S. goods.

China said it would impose 125% tariffs on U.S. goods, adding that if U.S. continues to impose additional tariffs, China will ignore it.

It had been a relatively orderly open compared to the turbulence of the last week or so but markets remain sensitive to trade headlines.

The pan-continental benchmark is last down 0.2% and heading for an almost 2% weekly drop as the fallout from Trump's tariffs continues.

Looking underneath the surface, 278 stocks are rising and 307 falling. Top sector gainers are defensives such as healthcare .SXDP (+0.8%) and utilities .SX6P (+1.1%). On the downside, energy shares .SXEP lag, down 1.3%.

Other major indexes are mostly lower. Germany's DAX .GDAXI is down 0.2%, having been higher in early trade and briefly turning positive for the week. It's now down just 0.6% this week, a remarkable turnaround after falling as much as 10% in early trade on Monday.

Britain's FTSE .FTSE is up 0.2% on Friday, while France's CAC 40 .FCHI is down 0.1%.

Investors might be minded to look to the currency and bond markets for the real action on Friday.

The U.S. dollar is coming under renewed selling pressure, particularly against the euro EUR=EBS, yen JPY=EBS and Swiss franc CHF=EBS.

Meanwhile, U.S. Treasury yields are higher again.

"Markets continue to reassess how much of the historical premium for US assets stemming from American exceptionalism is still justified," writes Deutsche Bank strategist Jim Reid.

The U.S. 30-year yield 30YT=RR is up about 50 basis points this week and heading for its biggest weekly increase since 1982. US/

Here's your opening snapshot:

(Samuel Indyk)

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