Europe midday: Stocks dip amid ongoing US-China frictions
By Alexander Bueso
Date: Thursday 17 Jan 2019
(Sharecast News) - Stockmarkets on the Continent are trading on the back foot with investor sentiment dampened by reports that the ongoing US government investigation into Chinese technology giant Huawei might soon yield an indictment.
"Renewed interest in Chinese activities in the US raises fears that Beijing will respond in kind. But the overall push higher in US equities remains intact, so we should avoid becoming too bearish on European markets for now," said Chris Beauchamp at IG.
According to Bloomberg, an indictment in the investigation - which is linked to a 2014 lawsuit alleging the theft of T-Mobile technology by its Chinese rival - could come soon.
As well, just the day before a bill was introduced in the US Congress which would prohibit the export of American components to Huawei or other Chinese telecom outfits which had broken American laws or sanctions. And reports on Thursday were indicating that Berlin might ban the company's products from being used in its telecoms infrastructure.
Against that backdrop, by 1401 GMT the benchmark Stoxx 600 was down by 0.35% or 1.21 points to 349.38, alongside a drop of 0.69% or 33.82 points to 4,776.71 on the Cac-40, while Germany's Dax was off by 0.57% or 61.98 points to 10,867.07.
Weighing on the French benchmark equity index, shares of Societe Generale were trading sharply lower on speculation that it might be set to shutter its proprietary trading unit.
Further afield, Sterling was edging higher against both the single currency and the US dollar, possibly on hopes that the hardest forms of Brexit might be avoided.
On the economic front meanwhile, Eurostat confirmed that the year-on-year rate of change for headline consumer prices within the single currency bloc slipped from 1.9% for November to 1.6% in December, as expected, while core CPI was steady at 1.0%.
A separate report revealed a 0.1% month-on-month dip in Eurozone construction output for the month of November.
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