European shares dip as doubts grow about U.S.-China trade truce
Reuters
Published Dec 04, 2018 04:32AM ET
European shares dip as doubts grow about U.S.-China trade truce
By Julien Ponthus
LONDON (Reuters) - European shares traded in negative territory on Tuesday morning as investors started to question whether the truce agreed by the United States and China on their trade dispute would lead to a long-term deal.
After enjoying a rally for its first day of trading in December, Germany’s DAX (GDAXI) – the most sensitive to China and trade war fears – was down 0.6 percent at 0906 GMT.
The pan-European STOXX 600 (STOXX) fell 0.3 percent.
"The number one driver for global risk sentiment is the U.S.-China trade talks, which suddenly don't look as promising as they did over the weekend," wrote Commerzbank (DE:CBKG) rates strategist Christoph Rieger.
The European automotive sector (SXAP), which is most sensitive to trade war fears, was the worst performing one, down 1.7 percent.
The tech sector (SXAP) was also a big loser, down 0.9 percent.
Chipmakers, which are also heavily exposed to China and trade sustained heavy losses with AMS (S:AMS) down 4.7 percent, Siltronic (DE:WAFGn) down 3.8 percent.
Adding to the weak sentiment, the yield curve between U.S. three-year and five-year notes and between two-year and five-year inverted on Monday, a first since the financial crisis, excluding very short-dated debt.
Analysts now fear an inversion of the two-year, 10-year yield curve could be imminent and point toward a possible U.S. recession.
"Recessionary fear is starting to raise its ugly head," wrote Stephen Innes at broker Oanda.
France's JCDecaux (PA:JCDX) posted one of the worst individual falls, down about 6 percent after Exane BNP Paribas (PA:BNPP) reinitiated its coverage of the stock with an "underperform" rating.
French catering group Elior (PA:ELIOR) sank 7.3 percent after cutting its sales growth outlook, and Belgian postal services firm Bpost plunged 20 percent after a profit warning.
Energy stocks were among the few gainers as oil prices rose amid expected OPEC-led supply cuts and a mandated reduction in Canadian output.
BP (L:BP) rose 0.6 percent and Royal Dutch Shell (AS:RDSa) 0.5 percent.
German industrial gases group Linde (DE:LINI) will replace British bank Barclays (L:BARC) on the leading index of pan-European stocks STOXX Europe 50 (STOXX50) STOXX Ltd, the operator of Deutsche Boerse (DE:DB1Gn) Group's index business, said.
Get The News You Want
The change comes as part of the quarterly reshuffle and will be effective at the opening of European trading on Dec. 24, STOXX said on Monday.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.