June 21, 2018 / 9:32 AM / a year ago

UPDATE 2-European shares hit by fresh Italian scare, Daimler tariff hit

* STOXX closes down 0.9 pct

* Daimler falls 4.3 pct after tariff profit warning

* Autos sector sinks 3.3 pct

* Italian shares, bonds fall on political risk (Adds closing prices)

By Helen Reid

LONDON, June 21 (Reuters) - European shares ended the day deep into the red after an early bounced on Thursday, shaken by the appointment of eurosceptics at key positions in the Italian parliament and after German carmaker Daimler warned higher tariffs would hit profits.

The autos sector fell 3.5 percent, its biggest loss in about two years, while the pan-European STOXX 600 tumbled 0.9 percent as fears about the ongoing U.S.-China trade dispute lingered on.

"The standoff between the U.S. and China is not any closer to being resolved and traders are fearful President Trump will turn up the heat on the EU (European Union) next," said David Madden, a market analyst at CMC Markets.

Equity markets have been relatively resilient in the face of mounting trade concerns but fell broadly this week as Trump threatened additional tariffs on $200 billion worth of Chinese goods.

Daimler became one of the biggest global companies to cut its guidance on trade tensions, warning profits would be hit in part by Chinese tariffs on car imports from the United States.

Daimler shares fell 4.3 percent to their lowest in nearly two years.

Some analysts were sceptical of Daimler's timing, saying the profit warning may be more driven by internal pressures than the external trade environment.

But UBS analysts said they expected consensus earnings estimate downgrades of 5 to 7 percent for the carmaker.

Volkswagen fell 3.1 percent and BMW 2.9 percent while Germany's DAX, which counts many heavy exporters among its constituents, underperformed the STOXX 600 with a 1.4 percent slump.

Financials stocks were the biggest drag in Europe after two leading eurosceptics from Italy's far-right League were named to head parliamentary finance committees.

Italy's FTSE MIB fell 2 percent with the country's banking index down 2.2 percent, while Italian bond yields rose amid renewed fears about the new populist government.

University professor Alberto Bagnai, who was named head of the Finance Committee in the Senate, published “Il tramonto dell’euro” (“The sunset of the euro”) in 2012.

Reporting by Helen Reid and Julien Ponthus Editing by Danilo Masoni/Mark Heinrich

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