European stocks drop before Trump-Xi ‘main event’

Agence France-Presse . London | Published: 00:00, Dec 01,2018 | Updated: 00:38, Dec 01,2018

 
 

The German share price index DAX is seen at the stock exchange in Frankfurt, Germany, August 23, 2018. — Reuters photo

Europe’s equity markets kicked lower Friday as investors awaited a crucial weekend meeting between Donald Trump and Xi Jinping.
The stormy build-up to the G20, which kicks off two days of talks Friday, has been dominated by US President Donald Trump’s tough stance on trade and climate fears, and by simmering tensions with Russia.
While the outcome of Saturday’s crunch talks between Trump and Chinese president Xi Jinping hangs in the balance, there are hopes the heads of the world’s top two economies can find a way to ease their trade row that has seen them exchange deep import tariffs.
‘There’s been a little bit of downside seen in the stock markets as investors nervously await the outcome of key meetings between world leaders at the G20 summit in Buenos Aires,’ said XTB analyst David Cheetham.
‘The main event on traders’ radars is clearly the Trump-Xi meeting — and what this means for trade between the world’s two largest economies going forward.’
Heading into afternoon deals, Frankfurt stocks shed 0.6 per cent and London lost 0.7 per cent while Paris shipped 0.5 per cent in value.
The losses came after a broadly upbeat session in Asia, while traders also eyed a fresh drop in world oil prices.
‘The risks still remain tilted to the downside ... as the tensions over trade and politics between China and the US hang over sentiment like a dark cloud,’ noted CMC Markets UK analyst Michael Hewson.
‘President Trump has already said he is close to a deal on trade with China; he’s just not sure that he wants to do it, which raised some optimism that some form of fudged compromise might come out of the weekend meeting.
‘The Chinese foreign ministry has said this morning it hopes that the US can show sincerity and meet China halfway in talks.
‘We shall see, but as the song says it takes two to tango, and it’s not immediately clear that the United States wants to.’
Ahead of the leaders’ arrivals in Buenos Aires late Thursday, there have been conflicting messages coming out of Washington about the chances of a breakthrough, with most observers saying they do not expect any major announcements.
In Asia, Tokyo stocks closed up 0.4 per cent, Hong Kong added 0.2 per cent, while Shanghai finished 0.8 per cent higher, with dealers poring over data showing Chinese manufacturing stalled in November as the effects of Trump’s multi-billion-dollar tariffs begin to bite.
Beyond the G20, traders are eyeing the following weekend’s gathering of OPEC and non-OPEC oil producers, where Saudi Arabia and others are expected to cut output in a bid to support prices.
But oil prices dipped Friday in volatile deals, one day after New York crude had ducked below $50 per barrel for the first time in almost 14 months.
The market had briefly bounced higher in Asian trading hours on a report that Russia will join in the expected output reduction.
The dollar meanwhile steadied after minutes from the Federal Reserve’s last policy meeting suggested concern about pressing on with its current pace of interest rate hikes.

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