European shares fell for the second straight session on Friday as investors grew fearful that China’s retaliation to a US law backing Hong Kong pro-democracy protesters could threaten to derail negotiations on a trade truce between the two countries.
On Thursday, China warned of “firm countermeasures” to the law.
The editor of China’s state-backed Global Times late on Twitter said that these could include barring drafters of the legislation from China, Hong Kong and Macau.
The pan-European STOXX 600 fell 0.44 percent, but still capped its best week in three, rising 0.9 percent, after a boost from positive headlines on trade earlier in the week.
“We were hoping that by December we might see some news, but it’s going to be difficult to achieve that at the moment,” said Jonathan Bell, chief investment officer at Stanhope Capital LLP.
“The strong run we’ve seen in markets recently, I suspect, will tail off as we head towards the year-end. Next year, I think we’ll still see an agreement,” Bell said.
The deal was initially expected by the middle of last month. In the absence of an agreement, the next round of US tariffs is due to take effect in just more than two weeks.
Frankfurt-listed shares fell 0.3 percent, as data showed retail sales in Germany dipped in October, suggesting that private consumption took a pause before the Christmas shopping season.
German shares have recovered in the past two months as the latest batch of data signaled that an economic downturn in Europe’s powerhouse could be bottoming out.
The country, which is heavily reliant on trade with China, escaped a recession last quarter, but the manufacturing sector is still declining.
Traders are awaiting a raft of other economic indicators, including the eurozone unemployment rate for October and preliminary GDP figures for the fourth quarter from Italy.
Norway’s largest bank DNB ASA fell 6 percent to the bottom of the STOXX 600 after police said they were investigating to establish whether any laws were broken in its handling of payments from an Icelandic fisheries firm to Namibia.
In a bright spot, British online grocer Ocado Group PLC jumped 15 percent, tracking its best day since May last year, as the company signed its first deal in Asia with Japan’s Aeon Co Ltd.
The wider retail index was one of the biggest gainers among the major European sectors.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion
MediaTek Inc (聯發科) has hired a former US Department of Commerce official to help it navigate worsening US-China tensions that have already ensnared its customer Huawei Technologies Co (華為). Patrick Wilson, who most recently served as director of the department’s Office of Business Liaison, has been appointed vice president of government affairs at MediaTek USA to lead its public policy initiatives, the chip designer said in a draft press statement seen by Bloomberg News. Wilson previously worked at the Semiconductor Industry Association, where he led the trade group’s dealings with the US federal government. Technology companies with ties to or operations in China