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(Sharecast News) - European shares extended losses on Wednesday as all eyes turned to Davos where US President Donald Trump was scheduled to address the World Economic Forum amid his demands to annexe Greenland and impose tariffs on any nation that opposed him.
The pan-regional Stoxx 600 index was down 0.69% to 598.66 at 1158 GMT with all major bourses lower. Germany's DAX and the UK's FTSE 100 fell 1% and 0.33% respectively.
Trump is due to address the forum at 1330 GMT, although his Air Force One plane was forced to return to Washington after reporting an electrical fault. The president was transferred to another plane and had landed in Zurich.
European leaders were formulating a response to the threat of increased tariffs against eight nations who said the semi-autonomous Danish state's sovereignty should be respected.
The authoritarian US leader insists annexation is vital for American security amid spurious claims that Russia and China have increased marine traffic in the region.
Signs of potential economic responses to Trump's behaviour emerged when Danish pension operator AkademikerPension said was dumping $100m in US Treasuries, citing "poor (US) government finances" amid America's debt crisis.
"The bond market is perhaps that only thing that will stop Trump going all the way on Greenland. And, on that front, we see some serious threats emerging from the Japanese bond market meltdown spilling over into a broader 'sell America' trade," said Saxo analyst Neil Wilson.
"Weaponisation of Europe's $8tn holdings of US stocks and bonds has been dropped into conversation but it's less clear how you would actually coordinate this as a 'response' to the crisis. Nevertheless, markets are clearly moving ahead of an expected rotation out of US assets by investors."
In equity news, Rio Tinto shares rose as the miner beat expectations for quarterly iron ore and copper production.
Barry Callebaut surged after the company appointed former Unilever boss Hein Schumacher as its chief executive.
Burberry and Pearson both rose after positive trading and earnings updates.
Reporting by Frank Prenesti for Sharecast.com
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