[SYDNEY] European stocks fell following a downbeat session in Asia after US President Donald Trump stepped up his tough talk on trade. Emerging-market shares took another hit, while the dollar and Treasuries held steady.

Carmakers and miners were the biggest losers in the Stoxx Europe 600 Index after Trump cast doubt on the scope of a trade deal between the US and Europe and was said to be moving toward further tariffs on Chinese goods as soon as next week.

The Stoxx Europe 600 Index declined 0.3 percent as of 8:02 am London time, to the lowest in a week.

Emerging-market equities fell a second day, while the Indian rupee dropped to a record and South Africa's rand slid to the lowest in two years as contagion spread from Argentina and Turkey. The euro edged up and the yen was steady, while bonds drifted.

Caution is returning to markets as global stocks round out a month that saw a solid rally from mid-August. While the Federal Reserve remains on its tightening path and Chinese authorities have moved to stem declines in the country's currency, the threat of global growth taking a hit from souring US-China relations remains front and center.

On trade, the US president wants to move ahead with a plan to impose tariffs on US$200 billion in Chinese imports as soon as a public-comment period concludes next week, according to people familiar with the matter. In an interview with Bloomberg he also provoked investor concern about the longevity of his recent agreement with Jean-Claude Juncker, which was intended to stave off a broader trade war.

Elsewhere, West Texas crude steadied above US$70 a barrel after breaking through for the first time in a month as shrinking stockpile levels in the US pointed to supply constraints.Terminal users can read more in our Bloomberg Markets Live blog here.

BLOOMBERG