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European stocks drop before Trump-Xi ‘main event’
LONDON, Dec 1, 2018 (BSS/AFP) – Global stock markets slipped in lacklustre
trading on Friday as investors awaited a crucial weekend meeting between
Donald Trump and Xi Jinping.
The stormy build-up to the G20, which kicks off on Friday for two days of
talks, 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, which has
seen them exchange deep import tariffs.
Key European exchanges closed mildly lower, with London the worst
performer because of Brexit worries, while on Wall Street the Dow also
slipped slightly in late morning New York trade.
“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.”
– ‘Takes two to tango’ –
“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.”
In Asia, Tokyo stocks closed up 0.4 percent, Hong Kong added 0.2 percent,
while Shanghai finished 0.8 percent 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.
– OPEC meeting up next –
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 any output reduction.
BSS/AFP/HR/0942