European shares on Friday broke a five-day winning streak after US President Donald Trump said that he has not agreed to roll back tariffs on China, adding to uncertainties on whether the two sides were really getting close to signing a partial deal.
The pan-European STOXX 600 on Friday ended down 1.14 points, or 0.3 percent, at 405.42 after gaining 2.5 percent over the previous five sessions. That was a 1.5 percent increase from 399.43 on Nov. 1.
Defensive plays including healthcare and utilities were the only sectors to rise, suggesting appetite for risk remained muted.
Trump’s comments worsened sentiment already hit by a similar statement from White House Office of Trade and Manufacturing Policy Director Peter Navarro, as well as sources who said that the plan faced fierce internal opposition at the White House.
That ended days of optimism as officials said that tariffs would be rolled back and the deal would be signed soon, which, along with an earnings season that has proved less weak than expected, helped the STOXX 600 log its fifth straight week of gains.
“This sentiment that perhaps investors should look to fade the optimistic advance that you saw in the earlier part of the week has been in the markets for about a day-and-a-half,” City Index market analyst Ken Odeluga said.
“The comment from the White House in more recent hours are merely conformation of that. The fact that Donald Trump has actually echoed some of these comments is a reason to adopt a defensive position into the weekend,” Odeluga added.
Miners, among the most exposed to the trade conflict and its implications on global growth, dropped 1.6 percent.
Bank stocks slid 1.2 percent, hit by declines for some of France’s biggest lenders. Shares in Credit Agricole Group fell 2.3 percent as quarterly numbers in its corporate center and retail arms came in below analysts’ expectations.
Shares in Natixis SA fell 7.3 percent after it trimmed its budget for potential acquisitions to focus on reinforcing existing businesses.
Campagnie Financiere Richemont SA slumped 5.7 percent after the luxury goods group said that political protests in Hong Kong weighed on sales growth in the six months to Sept. 30.
In bright spots, TIM SpA rose 1.2 percent after the Italian telecom said that it had made progress in cutting its debt burden, while London-based insurer Beazley PLC topped the index as falling US yields boosted investment returns, helping it fare better than larger rival Hiscox Ltd.
Over the weekend, today’s parliamentary election in Spain, the fourth in four years, will be closely watched.
According to a calculation by El Pais based on dozens of opinion polls, the election will do little to break a long-standing stalemate.
New parties have emerged after a financial crisis, fragmenting the political landscape and making it much harder to form governments with stable majorities.
Madrid’s benchmark stock index closed 0.6 percent lower, logging its worst day in a week-and-a-half.
Italian shares bucked the trend to end 0.1 percent higher, lifted by shares of Enel SpA, which rose after a UBS Group AG target price hike.
The utility firm said that it was awarded all 9,600 megawatts it offered in Italy’s first capacity market auction.
Additional reporting by staff writer
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