Top Movers

Europe close: Stocks drop amid heightened global trade concerns

By Alexander Bueso

Date: Thursday 06 Dec 2018

Europe close: Stocks drop amid heightened global trade concerns

(Sharecast News) - European stockmarkets came under heavy selling pressure on Thursday with the rout extending further during afternoon trading, as investors tracked weakness in shares on Wall Street and after OPEC and its allies failed to decide on an oil output cut, which saw energy futures slide lower.
The initial trigger for the selling was news that Canadian officials had arrested the finance chief of Chinese technology giant Huawei, at Washington's request, in connection with the alleged violation of American sanctions against Iran.

Analysts expressed concern that the arrest of Wanzhou Meng, which was carried out on 1 December, just as the US President and his Chinese counterpart, were holding meetings in Argentina, would add yet another hurdle to the trade negotiations between the two giants, although China's foreign ministry later said trade talks should continue.

Even so, Deutsche Bank said: "China will likely become more negative in respect to the trade war, and potentially against US companies. The government may find it difficult to tell the public that they have offered significant concessions to the US. The trade talk has just been resumed at the G20 meeting; now its outlook has darkened."

The German broker marked down the chances of a successful conclusion to the talks between Washington and Beijing by 1 March from 40% to 30%.

By the end of trading, the benchmark Stoxx 600 was down by 3.09% or 10.96 points at 343.31, alongside a drop of 3.48% or 389.26 points to 10,810.98 for the German Dax, while the FTSE Mibtel had fallen 3.54% or 684.87 points to 18,643.83.

Of interest for observers of the German market, the most likely successors of Angela Merkel as head of the CDU party have called for a review of the Nordstream 2 natural gas pipeline being built with Russia, the Journal reported.

According to another report from the Journal dating back to May, the US administration had pressed Berlin to stop construction in exchange for avoiding a trade war.

In the background meanwhile, the yield on the benchmark 10-year Italian Treasury note was climbing 14 basis points to 3.20%, amid reports that deputy prime minister Matteo Salvini was reticent to lower Rome's budget deficit target below 2.2% of GDP next year.

According to ANSA, on Thursday morning, Salvini also came out to deny newspaper reports that economy minister, Giovanni Tria, might be set to step down.

Economic news out of Europe was otherwise positive, with readings on both German factory orders and Greek unemployment both coming in better-than-expected.

In Germany, manufacturing sector orders rose by 0.3% month-on-month in October, the Ministry of Finance said, beating forecasts for a drop of 0.4%.

Over in Greece meanwhile, ELSTAT reported a fall in the country's rate of unemployment from 18.9% for August to 18.6% in October.

..

Email this article to a friend

or share it with one of these popular networks:


Top of Page