UPDATE 2-European shares crushed as Trump toughens stance on China

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* STOXX 600 posts worst fall since May
* Trump tweets hit trade-sensitive German shares
* Irish stocks hurt by Brexit woes

(Updates to close)
By Susan Mathew and Medha Singh
July 30 (Reuters) - Europe's main STOXX 600 index posted its
worst session since a selloff in May on Tuesday after U.S.
President Donald Trump ramped up his trade rhetoric against
China, deepening wounds left by a batch of weak economic data
and corporate earnings.
The pan-European equities index .STOXX closed down 1.5% in
heavy trading and Germany's trade-sensitive stocks .GDAXI hit
a six-week low after Trump warned China against waiting out his
first term in office to finalise any trade deal. Automakers, sensitive to trade headlines, .SXAP fell 2.3%.
But banks .SX7P led declines among European sectors due to
growing expectations of lower interest rates.
The U.S. Federal Reserve is set to conclude its monetary
policy meeting on Wednesday, with investors looking for signals
on whether a widely expected 25-basis-point rate cut from the
U.S. central bank will be the start of an easing cycle.
"It's unlikely you'll see consolidation tomorrow if there's
a (Fed) cut. In the short term, people are emptying their books,
taking profits and getting ready for holidays," said Stephane
Barbier de la Serre, a macro strategist at Makor Capital Markets
in Geneva.
As evidence continues to build of the impact of a bruising
trade war on global growth, expectations that major central
banks will adopt accommodative policies have buoyed global
markets since a sharp fall in May.
A series of weak economic data from France, Germany and the
euro zone as a whole painted a meagre growth outlook, lending
support to doves among the European Central Bank. A slide in the British pound on worries of a disorderly
Brexit failed to support the FTSE 100 .FTSE , which fell 0.5%.
Banks were a big drag on the index after the Bank of England
said they will have to tell investors in 2021 if they can be
closed down without creating havoc in financial
markets. British Gas parent Centrica CNA.L sank 19% to its lowest
level in more than two decades as it slashed its dividend and
said its chief executive would step down. Imperial Brands PLC IMB.L and British American Tobacco PLC
BATS.L slipped more than 4% after U.S. rival Altria Group
MO.N posted a tepid forecast for domestic cigarette volumes.
Ireland's main stock index ISEQ .ISEQ , which tends to fall
on fears of a no-deal UK departure from the European Union, slid
2.2%, its biggest one-day percentage drop since December 2018.
The latest company to become victim to trade disputes was
Germany's Bayer BAYGn.DE , which slipped 3.7% after the
agricultural supplies company said its full-year earnings target
has become harder to reach. Airline Lufthansa LHAG.DE dropped 6% after posting a
decline in second-quarter earnings and saying that the European
market was likely to remain challenging this year.