2018.05.2318:47:00UTC+00European Markets Retreat Amid Trade Tensions, Italian Government Uncertainty

European stocks fell on Wednesday, amid Italian government uncertainty, souring market sentiment over ongoing trade talks between the U.S. and China and a round of weak eurozone data.

The pan-European Stoxx 600 lost 1.1 percent, with all sectors and major bourses in the red.

Italy's FTSE MIB was among the worst performers among national indexes, down more than 1.3 percent as a sell-off in the country's government bonds resumed on Wednesday. Uncertainty over the creation of an anti-establishment government in Rome has prompted a sharp fall in the country's benchmark index.

Stocks in Europe declined as part of a global selloff fueled by worries about Trump's latest comments on North Korea and the China trade talks. The president said late there is a “very substantial chance” the historic meeting between him and North Korea's leader Kim Jong Un won't happen in June as planned unless Pyongyang meets certain conditions. Trump also said that he was “not satisfied” with the latest round of trade talks with China.

Europe's basic resource stocks led the declines, tumbling 2.47 percent amid heightened tensions in trade talks. The European Union's trade chief said that the bloc's efforts to persuade Washington not to impose tariffs on imports of EU steel and aluminum appeared to have failed.

The energy index, the biggest sectoral gainer so far this year in Europe, lost three percent as a sudden build in U.S. crude inventories and the possibility of an increase in OPEC output pulled down crude prices. It was the index's biggest single-day decline since the global stocks sell-off in early February.