May 4, 2020 / 7:16 AM / a month ago

London stocks retreat as U.S.-China coronavirus spat grows

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* FTSE 100 down 0.7%, FTSE 250 off 1.7%

May 4 (Reuters) - UK stock markets dipped on Monday as U.S.-China tensions flared up again over the origin of the coronavirus, while Rolls Royce tumbled on reports it was considering job cuts to ride out an economic slump.

The British aero-engine maker fell 4.2% to the bottom of the FTSE 100 after a source told Reuters it was mulling cutting up to 15% of its workforce as customers cut production and airlines parked planes due to a halt in global travel.

The blue-chip FTSE 100 was down 0.7%, deepening a 2.3% slide on Friday, when U.S. President Donald Trump pinned the blame for the pandemic on China and threatened new tariffs.

U.S. Secretary of State Mike Pompeo compounded those fears on Sunday by saying there was “a significant amount of evidence” the virus emerged from a laboratory in the central Chinese city of Wuhan. An editorial in China’s Global Times said he was “bluffing”.

European stock markets, several of which were closed for a May 1 holiday on Friday, tumbled as much as 3% in early trading on Monday.

The domestically focussed mid-cap index was down 1.7% at 0705 GMT. (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Anil D’Silva)

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