European Shares Slide As US-China Tensions Escalate

(RTTNews) - European stocks fell on Thursday in cautious trade as U.S.-China tensions over the South China Sea escalated.

While the United States blacklisted 24 Chinese firms and targeted individuals it said were part of construction and military actions in the South China Sea, Beijing fired four missiles into the world's most hotly contested body of water, further ratcheting up tensions between the two countries.

Traders also waited for Fed Chairman Jerome Powell's speech at the annual central bankers' conference later in the day for clues about whether a shift to easier policy is possible in coming months.

Analysts expect that Powell will outline dovish measures including a move toward average inflation targeting in which inflation above the central bank's usual 2 percent target would be tolerated and even desired.

The pan European Stoxx 600 dropped 0.45 percent to 371.47 after gaining 0.9 percent in the previous session. The German DAX fell half a percent, France's CAC 40 index declined 0.7 percent and the U.K.'s FTSE 100 was down 0.3 percent.

Givaudan, a Swiss manufacturer of fragrance and flavor products, edged up slightly after announcing its financial targets for the next five years.

Philips Electronics NV slid half a percent. The company has signed an agreement to acquire Intact Vascular, Inc., a U.S.-based developer of medical devices for minimally-invasive peripheral vascular procedures.

German online takeaway food group Delivery Hero fell 2.4 percent after it announced the acquisition of online grocery service InstaShop.

Bouygues soared 4 percent. After reporting a first-half net loss, the French industrial group stated that it will return to significant profitability in the second half of 2020, without reaching the particularly high levels of second half 2019.

WPP, the world's largest advertising group by sales, jumped nearly 5 percent as it returned to paying dividends after cost cuts and a switch to faster ad production.

Aerospace giant Rolls Royce Holdings slumped 6 percent after posting a hefty underlying loss for the half-year ended 30 June 2020.

Recruitment company Hays fell about 1 percent after posting lower profits for the full year.

Grafton Group shares surged 5.6 percent. The building materials supplier said that it emerged in a strong position from the Covid-19 lockdown and based on current trends the Group expects to deliver a similar level of adjusted operating profit in the second half to the comparable period last year.

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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