Portugal Colonial - Stocks, dollar retreat on new Trump trade threat

His comments overshadowed any optimism that came from the United States and China reaching a deal this week to dial down tensions.

The dollar slumped one percent against the euro, while oil prices slid on profit-taking, after having surged Wednesday.

Geopolitical concerns were also weighing on sentiment after Trump said US personnel were being moved from the Middle East, as nuclear talks with Iran faltered and fears of a regional conflict grew.

Asia's main stock markets mostly closed down, while eurozone indices led losses in Europe.

On the corporate front, shares in British carrier easyJet and British Airways owner IAG fell almost four percent, following news that a London-bound Air India plane -- a Boeing 787 -- had crashed in Ahmedabad.

Ahead of Wall Street reopening, Boeing said it was "working to gather more information".

Markets were firmly focused on Trump's latest move over tariffs.

"Mainland European markets are being hit hard... amid growing concerns that we could soon see the trade war break out once again," said Joshua Mahoney, chief market analyst at broker Rostro.

Trump shook confidence on Wednesday by saying he would soon send letters telling governments what levies Washington would be imposing.

"We're going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is," he told reporters.

"This is the deal, you can take it or leave it," he added.

The US had paused until July 9 reciprocal levies imposed on many trading partners at the start of April, to allow countries to cut deals with the White House.

This had sparked a relief rally for stocks.

But Trump's latest comments revived fears about sky-high levies and the impact on the economy. Trump has already threatened 50-percent levies on the EU once the July 9 deadline passes.

Outside the eurozone, London managed to limit losses even as official data showed the UK economy shrank more than expected in April, as tariffs kicked in.

Trump's renewed threat to hammer trading partners' exports came not long after US and China reached a tentative deal that would increase Chinese exports of rare earths while allowing Chinese students to remain in American universities.

Wall Street struggled on Wednesday as trade worries overshadowed another below-forecast inflation reading that provided fresh speculation the Federal Reserve will cut interest rates.

Oil prices slid 1.5 percent Thursday, having surged Wednesday when Trump said US personnel were being moved from the potentially "dangerous" Middle East as Iran nuclear talks stutter.

The move came as US reports suggested Israel could be preparing to strike targets in Iran, and as Tehran threatened to target US military bases in the region if a regional conflict broke out.

Trump, who had recently expressed optimism about the talks with Iran, said in an interview published Wednesday that he was "less confident".

- Key figures at around 1050 GMT -

London - FTSE 100: DOWN 0.1 percent at 8,851.96 points

Paris - CAC 40: DOWN 0.7 percent at 7,723.01

Frankfurt - DAX: DOWN 1.0 percent at 23,709.01

Tokyo - Nikkei 225: DOWN 0.7 percent at 38,173.09 (close)

Hong Kong - Hang Seng Index: DOWN 1.4 percent at 24,035.38 (close)

Shanghai - Composite: FLAT at 3,402.66 (close)

New York - Dow: FLAT at 42,865.77 (close)

Euro/dollar: UP at $1.1596 from $1.1489 on Wednesday

Pound/dollar: UP at $1.3591 from $1.3545

Dollar/yen: DOWN at 143.54 yen from 144.62 yen

Euro/pound: UP at 85.35 pence from 84.79 pence

West Texas Intermediate: DOWN 1.5 percent at $67.13 per barrel

Brent North Sea Crude: DOWN 1.5 percent at $68.75 per barrel

C.Cassis--PC