European shares fall amid disappointing bank earnings

Economy and stock exchange

European shares fell on Wednesday after rebounding on Tuesday as a softer tone from US President Donald Trump eased investors' concerns over the worsening trade ties between China and the United States.

By 0743 GMT, the Stoxx 600 European index was down 0.4 percent, and the Italian and Spanish indexes, which are booming banks, were losing ground after some bad results from their banks.

Trump on Tuesday described the trade dispute with China as a "minor dispute" and expressed optimism about a deal, and his comments contributed to the recovery of markets from a two-month low after the two sides exchanged customs duties on each other's imports.

Germany's DAX, Europe's most sensitive indicator of trade-related concerns, fell 0.4% despite the latest data showing that Europe's largest economy returned to growth in the first quarter.

Europe's auto sector fell 1.3% after being among the most bullish on Tuesday, and Renault fell nearly 3% after its Japanese partner Nissan issued grim earnings forecasts, and Volkswagen fell nearly 3%.

The banking sector index fell 0.9 percent on disappointing results, with Austrian bank Raiffeisen and ABN Amro falling below expectations and French-based Crédit Agricole's net profit slumping in the first quarter after the impact of two non-recurring events increased earnings in some sectors.

Contrary to the general trend, British bank CUPG jumped 6 percent to Stokes 600 after making first-half profit, and Lafarge Holsim rose 1.3 percent after the world's biggest cement maker reported an increase in operating profit.