Sun, Dec 01, 2019 - Page 14 News List

European shares dip amid trade caution

Reuters

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.

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