(Reuters) – European stocks opened lower on Tuesday, hit by a drop overnight on Wall Street following a flare-up in U.S.-China tensions and new coronavirus restrictions.

The pan-European STOXX 600 index fell 1.3% by 0712 GMT, with technology stocks .SX8P slumping 2.7%.

U.S. tech majors lost momentum on Monday after California shut bars, banned restaurant dining and other businesses to contain a surge of coronavirus infections, raising fears it may slow a U.S. economic recovery. [.N]

Meanwhile, Washington on Monday rejected China’s disputed claims to offshore resources in the South China Sea, a move that Beijing criticised as inciting tensions in the region.

The latest skirmish dampened risk sentiment even as investors were hopeful that companies will surpass beaten-down earnings expectations with the reporting season underway.

German meal-kit delivery firm Hellofresh (HFGG.DE) gained 4.3% as it raised its full-year revenue forecast, while industrial technology group Hexagon (HEXAb.ST) jumped 5.9% after forecasting second-quarter profit above market expectations.

Norwegian oil firm Aker BP (AKERBP.OL) slipped 2.4% as crude prices fell, but the company beat second-quarter pre-tax profit expectations.

Reporting by Sruthi Shankar in Bengaluru

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