EUROPE MARKETS: European Stocks Close Lower As Trade Tensions Flare Up Again
August 06 2018 - 12:35PM
Dow Jones News
By Sara Sjolin and Victor Reklaitis, MarketWatch
HSBC shares slip after earnings
European stock markets finished down slightly Monday, as traders
digested a flare-up in trade tensions between the U.S. and China as
well as another round of earnings reports.
In the U.K., investors weighed up the latest Brexit developments
after the country's trade secretary said there's a real risk
Britain will leave the European Union without a deal on trade.
What are markets doing?
The Stoxx Europe 600 index slipped 0.1% to end at 388.66, after
swinging in and out of positive territory. The small loss on Monday
followed a 0.7% rally on Friday
(http://www.marketwatch.com/story/european-stocks-recover-ground-lifted-by-tech-sector-2018-08-03),
when tech shares tracked their U.S. counterparts higher after a
well-received earnings report from Apple Inc. (AAPL).
France's CAC 40 index dipped less than 0.1% to close at 5,477.18
on Monday, while Germany's DAX 30 index lost 0.1% to finish at
12,598.21. The U.K.'s FTSE 100 index edged up less than 0.1% to end
at 7,663.78, helped by the pound's drop after the trade official's
Brexit remarks.
The euro dipped to $1.1564, down a little from $1.1568 late
Friday in New York.
The pound was down at $1.2946, compared with $1.3002 on Friday.
It has fallen to levels last seen about 11 months ago
(http://www.marketwatch.com/story/british-pound-at-11-month-low-versus-dollar-as-brexit-fears-flare-up-2018-08-06).
What is driving the market?
The downbeat trading action came as worries about global trade
tensions persisted, after U.S. President Donald Trump over the
weekend tweeted that American tariffs are "working far better than
anyone ever anticipated
(https://twitter.com/realDonaldTrump/status/1025830647649247232)."
That followed China's threat on Friday
(http://www.marketwatch.com/story/china-threatens-new-tariffs-on-60-billion-of-us-products-2018-08-03)
to place tariffs on $60 billion of American goods if the White
House goes ahead with its plans to impose new levies on Chinese
products.
China's Global Times newspaper said Beijing is ready to dig in
for a "protracted war"
(http://www.marketwatch.com/story/us-has-lost-its-mind-over-trade-beijing-ready-for-long-fight-chinese-newspaper-2018-08-06)
with the U.S. over trade. Equity strategists have warned that the
escalating trade fight could weigh on global economic growth.
In a sign that the continuing global trade dispute is weighing
on corporate investments, German manufacturing orders plunged in
June by 4%
(http://www.marketwatch.com/story/german-manufacturing-orders-plunged-in-june-2018-08-06-24854214),
data out on Monday showed.
Meanwhile, in the U.K., international trade secretary Liam Fox
said in a Sunday Times interview
(https://www.thetimes.co.uk/edition/news/liam-fox-says-there-is-a-6040-chance-of-no-dealbrexit-lpsgm2gdf)
over the weekend that there is a 60% chance that Britain will crash
out of the European Union without a deal with the bloc.
Don't miss:A top London startup's CEO flags the biggest Brexit
threat to his industry
(http://www.marketwatch.com/story/a-top-london-startups-ceo-flags-the-biggest-brexit-threat-to-his-industry-2018-08-06)
What are strategists saying?
"Disappointing new orders data show tentative signs of trade
tensions hitting the German economy, which doesn't bode well for
the industrial outlook in the second half of the year," said
Carsten Brzeski, chief German economist at ING, in a note.
"Before turning to the second half of the year, however, second
quarter GDP will get more attention. While Eurostat already
released a preliminary flash estimate for GDP growth in the entire
eurozone in the second quarter, Germany has only today started to
count hard data for the month June. It was definitely not a good
start," he added.
Stock movers
Shares of IWG PLC(IWG.LN) sank 21% after the
coworking-and-workspace company ended talks with potential suitors
(http://www.marketwatch.com/story/iwg-ends-talks-with-potential-suitors-profit-dips-2018-08-06),
saying it believes none of the interested parties can currently
deliver a deal at a price its board could recommend.
Shares in Just Eat PLC(JE.LN) declined 1.5% after the
food-delivery company posted first-half results. It was a
bittersweet period, as the company delivered a profit fall but
raised 2018 revenue guidance, a Dow Jones Newswires report
said.
HSBC Holdings PLC(HSBA.LN)(HSBA.LN) dropped 1% after the bank
said adjusted profit before tax fell
(http://www.marketwatch.com/story/hsbc-profit-gets-a-lift-from-retail-banking-2018-08-06).
Linde AG gave up 1.9% after the German industrial-gases company
said Sunday that it and Praxair Inc.(PX) may have to sell more
assets than expected to get antitrust approval for their merger.
That is seen as potentially jeopardizing the deal
(http://www.marketwatch.com/story/linde-shares-sink-as-ftc-comments-on-praxair-deal-2018-08-06).
On an upbeat note, Tod's SpA (TOD.MI) jumped 17.4% after the
Italian luxury goods company posted better-than-expected first-half
results
(http://www.marketwatch.com/story/tods-shares-rise-after-earnings-release-2018-08-06).
(END) Dow Jones Newswires
August 06, 2018 12:20 ET (16:20 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024