LONDON (Reuters) - Investors took cover and ditched European shares on Monday as a burst of political risk with a key vote on Brexit being delayed and unrest over the weekend in France added to concerns over global growth and U.S-Chinese trade tensions.
Losses accelerated at the end of the session when Wall Street indexes slid and the S&P 500 hit its lowest level since April.
The pan-European STOXX 600 ended the session down 1.8 percent at a new two-year low.
Britain's FTSE 100 .FTSE closed down 0.8 percent with the pound falling 1.5 percent and providing an accounting boost to blue chips with revenues in foreign currencies.
The more domestically exposed FTSE 250 .FTMC suffered over twice the losses with a 2 percent decline.
“France, Brexit UK, Italy, even Germany soon-under-new-leadership - there is no political visibility in Europe,” Kepler Cheuvreux strategist Christopher Potts wrote in a report published ahead of the Brexit vote being postponed.
“For international investors European equity has become virtually un-investable, unless and until it becomes extremely cheap,” he added.
Adding to the gloom, oil stocks .SXEP fell 2.4 percent, erasing their 2018 gains. Oil had been the last sector holding on to gains in Europe, and all the STOXX 600 sector indices are now in the red.
Echoing the weakness in global stock markets, oil prices erased some of the gains made last week when producer group OPEC and other key exporters agreed to cut their crude output from January to prevent oversupply.
Shares in BASF (BASFn.DE) fell 3.8 percent after the German chemicals firm slashed its forecast for 2018 profits on Friday.
It said the decline was mainly due to its chemicals business, while low water levels on the Rhine and weak automotive demand, especially in China, were also to blame.
Autos stocks .SXAP, which are seen as most exposed to international trade tensions, were the worst performing sector with a 2.8 percent fall.
Unless U.S.-China trade talks wrap up successfully by March 1, new tariffs will be imposed, U.S. Trade Representative Robert Lighthizer said on Sunday, clarifying there is a “hard deadline”.
(For a graphic on 'All European sectors erase 2018 gains' click tmsnrt.rs/2QL7Foh)
Additional reporting by Josephine Mason and Danilo Masoni; Editing by Mark Potter and Ed Osmond