EUROPE MARKETS: Europe Stocks Hammered By U.S.-China Trade Tensions
August 05 2019 - 6:06AM
Dow Jones News
By Steve Goldstein, MarketWatch
Europe stocks dropped sharply on Monday on concerns about being
caught up in escalating U.S.-China trade tensions.
The Stoxx Europe 600 index skidded 1.93% to 370.86, with
pharmaceuticals, banks and oil producers leading the decline.
The U.K. FTSE 100 index tumbled 1.96% to 7262.24, the German DAX
tumbled 1.7% to 11670.57 and the French CAC 40 skidded 2.04% to
5249.52.
What's moving markets
Asian stocks were hit hard as the dollar rose about the key 7
level vs. the Chinese yuan
(http://www.marketwatch.com/story/chinas-yuan-falls-below-key-level-with-us-dollar-2019-08-04),
and as protests continued in Hong Kong. Markets are still reacting
to the news that the U.S. plans to impose 10% tariffs on $300
billion of Chinese goods that, unlike past tariff rounds, would
focus on consumer products. China has said it would retaliate.
"German manufacturing continues to weaken. Driven by China
weakness and autos, a swift turnaround seems unlikely. This is
Europe's weak spot," said Ruben Segura-Cayuela, an economist at
Bank of America Merrill Lynch.
The yield on the key 10-year Treasury dropped as traders priced
in the possibility of more Fed rate cuts. "The fact that the Fed
bases its interest rate policy on US-China trade tensions rather
than the economic data raises the suspicion that Donald Trump may
be adding fuel to the flames on the Chinese side to increase
pressure for lower rates," said Ipek Ozkardeskaya, senior market
analyst at London Capital Group. U.S. stock futures pointed to a
sizeable decline at the open.
Focus stocks
HSBC Holdings shares (HSBA.LN) (HSBA.LN) dropped 2.1% after the
bank ousted its chief executive
(http://www.marketwatch.com/story/hsbc-ceo-john-flint-ousted-after-just-18-months-2019-08-04),
John Flint, and announced a rise in second-quarter profit. The bank
also announced it is going to cut thousands of jobs
(http://www.marketwatch.com/story/hsbc-to-cut-thousands-of-jobs-after-ceo-ouster-2019-08-05).
Airlines continued to benefit from lower jet fuel prices as
crude-oil futures get pressured. International Consolidated
Airlines (IAG.LN) shares rose 1% and Lufthansa (LHA.XE) added
0.7%.
Scout24 (G24.XE) shares edged up 0.5% as the activist investor
Elliott
(http://www.marketwatch.com/story/elliott-advisors-pressures-scout24-2019-08-05)
pushed the German classifieds firm to sell its car-listings
business and ramp up a share buyback.
(END) Dow Jones Newswires
August 05, 2019 05:51 ET (09:51 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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