STOXX 600 hits three-month low on China jitters, earnings

The STOXX 600 also notched its sharpest one-day drop since early August after Monday's 1% jump

Europe's main index plunged 2% to a near three-month low on Tuesday, as concerns over the fate of U.S.-China relations cast a shadow over stocks with significant exposure to the world's second largest economy, while some downbeat earnings also weighed.

The STOXX 600 also notched its sharpest one-day drop since early August after Monday's 1% jump.

European equities have been under stress as investors assessed the likelihood of tariff increases after Trump's sweeping U.S. presidential victory last week.

China-related assets struggled as Trump is expected to tap U.S. Senator Marco Rubio to be his secretary of state, who has in past years advocated for a strong foreign policy with respect to countries including China.

As he's forming his teams and the names are coming through, the market is having a realization of what could be coming, said Fiona Cincotta, senior market analyst at City Index.

China's economic position is quite fragile and if you are having huge tariffs being placed on China when it is already weak, that is going to affect its imports and that will naturally impact Europe, she said.

Basic resources plummeted 3.7% as most metal prices dropped, with Polish miner KGHM declining 9.2% and one of the worst-hit on the STOXX 600.

Personal and household goods, which houses heavyweight China-exposed luxury firms, declined 2.4%. The broader luxury index was also almost 4% lower.

However, the technology sector was largely flat in the face of deep sectoral losses, driven by a 4% rise in Temenos following the Swiss banking-software company's strategic plan to accelerate growth over four years.

Among earnings-driven losses, German group Bayer plunged 14.5% after warning weak agricultural markets could dent its earnings further next year.