Markets

European Markets End Lower On Trade War Concerns

(RTTNews) - European markets ended lower on Wednesday amid an escalation in U.S.-China trade war tensions after U.S. President Donald Trump threatened on Tuesday that he would impose even higher tariffs on Chinese goods if a trade deal is not made between the two countries.

After some positive news during the course of the previous week and over the weekend about the two countries closing in on an interim trade deal, optimism about a pact faded this Monday after it was reported that Trump is reluctant to roll out tariff cuts.

Now, with the U.S. President coming out with a threat to impose even higher tariffs on Chinese goods, investors are worried about further delays before the two countries would agree on a pact.

The ongoing protests in Hong Kong weighed as well on sentiment. Beijing is upset following the U.S. Senate passing a bill certifying Hong Kong's autonomy and issuing a warning to China against violent action against protesters. Beijing has stated that it would retaliate if the U.S. does not stop interfering in China's internal affairs.

Investors were also digesting the latest batch of economic data and corporate news from the euro area.

The pan European Stoxx 600 ended down 0.41%. The U.K.'s FTSE 100 declined 0.84%, Germany's DAX ended 0.48% down and France's CAC 40 shed 0.25%, while Switzerland's SMI bucked the trend and edged up 0.19%.

Among other markets in Europe, Denmark, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Turkey and Ukraine ended weak.

Austria, Belgium, Finland, Czech Republic and Iceland ended flat.

In Germany, Wirecard shares plunged more than 6% in early trades before staging a recovery to cut its loss to around 3.3%. The stock fell after Ernest Young auditors refused to certify the 2017 annual balance sheet of Wirecard's Singapore subsidiary.

Lufthansa declined 2.5%. Continental, Bayer, MTU Aero, Fresenius, Vonovia and Volkswagen ended lower by 1 to 1.6%.

In the French market, Accor, Unibail Rodamco, Pernod Ricard, Publicis Groupe and Bouygues ended notably lower.

On the other hand, Technip rose more than 2.5% and Thales gained about 1.5%. Dassault Systemes, BNP Paribas and ArcelorMittal also closed higher.

Meanwhile, Hipay Group shares, which soared more than 12% early on in the session, ended with a gain of about 5.5%.

In the U.K. market, Aviva shed about 3.5%. Intercontinental, DCC, Hargreaves Lansdown, 3i Group, Carnival, Bunzi, Burberry Group, Admiral Group and Fresnillo ended lower by 1 to 2.8%.

Kingfisher shares declined sharply on weak third-quarter sales.

Vodafone said it has bagged a seven-year technology partnership with Ryanair to handle online booking, passenger boarding and in-flight transactions for the Irish airline. However, despite the positive news, the stock ended down 0.5%.

IAG shares edged down by about 0.3%. According to reports, a former executive of British Airways was indicted for accepting bribes from a ground handling company.

Micro Focus shares gained nearly 5% after the company said its full-year profit will be in line with existing guidance.

On the economic front, Germany producer prices declined for the second straight month in October largely driven by energy prices, data from Destatis showed.

Producer prices fell by 0.6% year-on-year in October, bigger than the 0.1% drop in September. This was the second straight decrease. Economists had forecast an annual 0.4% fall.

On a monthly basis, producer prices dropped 0.2%, in contrast to a 0.1% increase in September. Prices were forecast to rise 0.1%.

Excluding energy, producer prices gained 0.3% on month but declined 0.2% from the same period last year. Energy prices decreased 3.1% annually.

The European Central Bank said in its Financial Stability Review that the euro area financial stability environment remains challenging and non-banks have increased their exposure to riskier assets to address profitability challenges.

The central bank said signs of excessive risk-taking in some sectors require monitoring and targeted macro-prudential action in some countries.

Meanwhile, ECB executive board member Philip Lane said in an interview to the La Repubblica Newspaer that Eurozone's economy is is unlikely to enter a recession although growth is more slower than expected.

"There's no doubt that, compared with 2017, there's been a sustained slowdown, but in the euro area we don't see a recession," Lane told the Italian daily.

"We expect that there will be forces that help the recovery over the next year or two, including our monetary policy, which is going to contribute because it is leading to lower lending rates to firms and households," the rate-setter added.

"The European economy has been growing more slowly than we hoped. It's a disappointing performance, but not a negative one," Lane said.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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