EUROPE MARKETS: European Stocks Stage Recovery, But U.S.-China Trade Tensions Remain
June 20 2018 - 5:19AM
Dow Jones News
By Carla Mozee, MarketWatch
Tobacco stocks rise on ratings call
European stocks on Wednesday bounced off a nearly three-week
low, staging a recovery as traders came to terms with the further
deterioration in the trade relationship between the U.S. and China
that sent equities worldwide tumbling in the prior session.
How markets are performing
The Stoxx Europe 600 Index rose 0.6% to 385.61, on course to
wipe out Tuesday's drop of 0.7%
(European%20stocks%20finish%20at%203-week%20low%20as%20U.S.-China%20trade%20tensions%20escalate)
that marked its lowest close since May 31. All sectors rose on
Wednesday, led by the basic materials group that led decliners on
Tuesday.
Germany's DAX 30 index climbed 0.5% to 12,734.41, following
Tuesday's retreat of 1.2%. France's CAC 40 index rose 0.2% to
5,401.04.
Italy's FTSE MIB index charged up 0.8% to 22,260.22, and Spain's
IBEX 35 declined 0.9% at 9,845.80.
The U.K.'s FTSE 100 was up 1.1% at 7,684.52.
The euro traded slightly lower at $1.1573, from $1.1589 late
Tuesday in New York.
What's driving markets
A measure of calm was returning to equity markets, even though
the U.S. and China were still locking horns on trade issues. The
Shenzhen index added 1.2% in Asian trade after Tuesday's 5.8%
slide, and the Shanghai Composite was up a more modest 0.3%. Hong
Kong's Hang Seng Index gained 0.9%.
The Trump administration accused China of waging a systematic
campaign of "economic aggression" in a report released Tuesday
(http://www.marketwatch.com/story/navarro-report-blasts-china-for-systematic-economic-aggression-2018-06-19),
and that followed U.S. President Donald Trump's indication that he
wants his administration to hit China with further tariffs on $200
billion in imported goods. Trump was responding to Beijing's threat
to retaliate against U.S. tariffs with its own levies on another
batch of U.S. products
(http://www.marketwatch.com/story/china-threatens-further-tariffs-on-us-products-as-trade-conflict-escalates-2018-06-19).
Read:China can't match Trump in a tariff fight, but it does have
other weapons
(http://www.marketwatch.com/story/china-cant-match-trump-in-a-tariff-fight-but-it-does-have-other-weapons-2018-06-19)
Also:Escalating U.S.-China trade spat comes at a bad time for
global growth, economist says
(http://www.marketwatch.com/story/escalating-us-china-trade-spat-comes-at-a-bad-time-for-global-growth-economist-says-2018-06-15)
"The markets have been trading on the same piece of general
trade war news for a while, as a result selling exhaustion has
started to set in," leading Asian stocks to rise and European
equities to open higher, said Jasper Lawler, head of research at
London Capital Group, in a note.
"Any fresh news of retaliation could see traders snatch risk
back off the table quickly," he said.
Investors are also watching developments from the Organization
of the Petroleum Exporting Countries, whose members are gathering
in Vienna
(http://www.marketwatch.com/story/what-time-is-the-opec-meeting-2018-06-19).
While meetings are set for Friday and Saturday, OPEC Secretary
General Mohammad Barkindo on Wednesday delivered his opening speech
for the group's International Seminar, and oil ministers have
started making comments on the sidelines. Oil prices were up nearly
1%, above $65 a barrel.
See:What time is the OPEC meeting?
(http://www.marketwatch.com/story/what-time-is-the-opec-meeting-2018-06-19)
And read:Why Goldman Sachs still sees oil peaking above $82 a
barrel this summer
(http://www.marketwatch.com/story/why-goldman-sachs-still-sees-oil-peaking-above-82-a-barrel-this-summer-2018-06-18)
Meanwhile, British lawmakers in the House of Commons are
expected to continue their debate of the bill that will take the
U.K. out of the European Union. On Monday, the U.K. House of Lords
voted to give Commons members a "meaningful vote" on the final
Brexit deal, a result that's considered a defeat for the U.K.
government led by Prime Minister Theresa May.
Stock movers
Imperial Brands PLC (IMBBY) rose 2.9%, and British American
Tobacco PLC (BATS.LN) gained 2.7%, with Liberum starting coverage
on the tobacco producers with buy ratings.
Berkeley Group Holdings PLC (BKG.LN) dropped 4.1% after the U.K.
home builder said it expects profit to be around 30% lower in
fiscal 2019
(http://www.marketwatch.com/story/berkeley-group-foresees-lower-profit-2018-06-20)
and that pretax profit in fiscal 2018 represented a peak.
Etablissementen Franz Colruyt NV (COLR.BT) shares jumped 10%
following the Belgian retailer earnings report.
(END) Dow Jones Newswires
June 20, 2018 05:04 ET (09:04 GMT)
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