LONDON: European stock markets dropped on Monday (Aug 12) as escalating protests in Hong Kong forced the closure of the financial hub's airport, adding geopolitical worries to ongoing trade war tensions.
London, Frankfurt and Paris all closed lower after news of the shutdown spread, having reversed an early stronger trend.
"Hong Kong has kind of been under the radar of most traders ... but increasingly I feel that this has the potential to spiral into a bigger market worry. Today's moves highlight the risks," said Neil Wilson, chief analyst at traders Markets.com.
All flights in and out of Hong Kong were cancelled late Monday after thousands of protesters flooded into the city's airport to denounce police violence.
The abrupt shutdown came as the Chinese government signalled its rising anger at the protesters, denouncing some of the violent demonstrations as "terrorism".
Hong Kong's main shares index closed lower just as news of the shutdown emerged.
Hong Kong airline Cathay Pacific meanwhile on Monday warned staff that they could be fired for supporting "illegal protests", as the firm comes under pressure from Beijing.
The carrier's stock slumped more than four percent after Beijing imposed new rules banning airline staff involved in the protests from flights to or over the mainland.
Taking their cue from Europe, US stock markets were also lower approaching midday in New York.
"US stocks are kicking off the week in the red, with elevated US-China trade tensions, the continued drop in global bond yields and festering unrest in Hong Kong weighing on conviction," said analysts at Charles Schwab.
Concern about the outlook for a slowing world economy also weighed on stock market sentiment, dealers said.
On currency markets, the euro recovered versus the dollar having suffered Friday on Italian political woes.
In Argentina, meanwhile, the peso and the Buenos Aires stock exchange plummeted after a crushing defeat for President Mauricio Macri in party primaries over the weekend.
Key figures around 1540 GMT:
London - FTSE 100: DOWN 0.4 per cent at 7,226.72 points (close)
Frankfurt - DAX 30: DOWN 0.1 per cent at 11,679.68 (close)
Paris - CAC 40: DOWN 0.3 per cent at 5,310.31 (close)
EURO STOXX 50: DOWN 0.2 per cent at 3,326.55
Hong Kong - Hang Seng: DOWN 0.4 per cent at 25,824.72 (close)
Shanghai - Composite: UP 1.5 per cent at 2,814.99 (close)
Tokyo - Nikkei 225: Closed for a public holiday
Euro/dollar: UP at US$1.1226 from US$1.1202 at 2055 GMT on Friday
Pound/dollar: UP at US$1.2081 from US$1.2034
Euro/pound: DOWN at 92.94 pence from 93.09 pence
Dollar/yen: DOWN at 105.27 yen from 105.62 yen
Brent North Sea crude: UP 13 cents at US$58.66 per barrel
West Texas Intermediate: UP 20 cents at US$54.70 per barrel