European Markets Dropped On Renewed Trade War Worries

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(RTTNews.com) - The European markets opened slightly higher Friday, but ended the session firmly in negative territory. A day after the European Central Bank announced plans to end its bond purchases, markets tumbled on renewed concerns over a global trade war.

U.S. President Donald Trump has announced plans to impose a 25 percent tariff on $50 billion worth of Chinese goods that contain "industrially significant technologies."

Trump attributed the new tariffs to China's theft of intellectual property and technology and its other unfair trade practices.

Trump claimed he would impose additional tariffs on Chinese goods if China retaliates by imposing new tariffs on U.S. goods or services, raising non-tariff barriers, or taking punitive actions against American exporters.

China'sCommerce Ministry has accused Trump of launching a trade war and promised to impose tariffs matching the scale and intensity of the U.S. tariffs.

The pan-European Stoxx Europe 600 index weakened by 0.84 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.63 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.85 percent.

The DAX of Germany dropped 0.74 percent and the CAC of France fell 0.48 percent. The FTSE 100 of the U.K. declined 1.70 percent and the SMI of Switzerland finished lower by 0.55 percent.

In Frankfurt, Commerzbank fell 3.76 percent and Deutsche Bank dropped 1.50 percent as government bond yields extended declines on the back of dovish signals from the ECB.

In Paris, Dassault Systèmes rose 0.61 percent after the company said it is initiating a 2018-2023 plan to double its non-IFRS earnings per share.

In London, Glencore dropped 4.32 percent after settling a legal dispute in the Democratic Republic of Congo.

Indivior sank 28.17 percent after the U.S. FDA approved Dr. Reddy's Laboratories' generic version of Indivior's Suboxone.

Tesco rallied 2 percent. The retailer delivered positive like-for-like sales growth for a tenth consecutive period in the first quarter.

Rolls Royce Holdings soared 7.61 percent. The jet-engine manufacturer said that it is well-placed to exceed free cash flow of 1 billion pounds by 2020.

Novartis gained 0.13 percent in Zurich. Its unit Sandoz has announced the presentation of two long-term, Phase III studies: one each for biosimilar Zessly or infliximab and biosimilar Erelzi or etanercept.

Clothing group H&M Group sank 4.31 percent in Stockholm after posting muted growth in Q2 sales.

Eurozone consumer prices increased as estimated in May, final data from Eurostat revealed Friday. Inflation rose to 1.9 percent in May from revised 1.3 percent in April. A similar high rate was last seen in April 2017. The latest rate matched the initial estimate released on May 31.

The euro area trade surplus declined to a six-month low in April on higher imports, figures from Eurostat revealed Friday. The trade surplus fell to a seasonally adjusted EUR 18.1 billion in April from EUR 19.8 billion in March. This was the lowest since October, when the surplus totaled EUR 17.7 billion.

Germany's wholesale prices increased at the fastest pace in six months in May, Destatis showed Friday. Wholesale prices advanced 2.9 percent year-on-year in May, faster than the 1.4 percent increase seen in April. This was the fastest growth since November, when prices gained 3.3 percent.

Growth in New York manufacturing activity unexpectedly accelerated in the month of June, according to a report released by the Federal Reserve Bank of New York on Friday. The New York Fed said its general business conditions index climbed to 25.0 in June from 20.1 in May, with a positive reading indicating growth in regional manufacturing activity.

The increase by the headline index came as a surprise to economists, who had expected the index to edge down to 19.0.

With a drop in manufacturing output more than offsetting jumps in mining and utilities output, the Federal Reserve released a report on Friday unexpectedly showing a modest decrease in U.S. industrial production in the month of May.

The Fed said industrial production edged down by 0.1 percent in May after climbing by an upwardly revised 0.9 percent in April. The dip came as a surprise to economists, had expected production to rise by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.

A report released by the University of Michigan on Friday showed a much bigger than expected improvement in U.S. consumer sentiment in the month of June. The report said the preliminary reading on the consumer sentiment index for June came in at 99.3 compared to the final May reading of 98.0. Economists had expected the index to inch up to 98.5.

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This article appears in: World Markets , US Markets , Stocks
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