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European stocks waver before weekend
LONDON, Feb 9, 2019 (BSS/AFP) – Europe’s stock markets wavered Friday as
investors wearily eyed doubts over US-China trade talks and the global growth
outlook.
Global concerns over economic growth made for a gloomy session across
equity trading floors Friday as investors digested weak indicators and tired
of hoping for a US-China trade talks breakthrough.
Key European stock markets were all lower at the close, with Frankfurt
again the weakest performer after the outlook for German growth, crucial for
the eurozone, became the focus of investor jitters.
Wirecard shares were the main losers on the German DAX index as fraud
allegations piled on top of investors’ concerns about lack of transparency,
costing the stock around 13 percent of its value by the close.
“A varied set of indicators flashing signs of slowing global growth were
enough to unnerve investors,” said Jasper Lawler, head of research at LCG.
Wall Street was also down in the late New York morning and looked poised
to clock up a third straight day of losses.
“The past 24 hours has been dominated by growth concerns, with UK,
eurozone, and now Australian GDP expected to come in significantly lower than
had previously been speculated,” IG analyst Joshua Mahony said.
– ‘Fraught negotiations’ –
Earlier, Tokyo led an Asia-wide slump, while Hong Kong returned from the
three-day Lunar New Year break also in the red as investors reacted to
negative signals from the US ahead of crunch trade negotiations in Beijing.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven
Mnuchin are due to travel to China next week for a third round of talks.
But US President Donald Trump told reporters he did not expect to meet his
Chinese counterpart Xi Jinping before the March 1 deadline, when US duties on
$200 billion in Chinese imports are due to jump sharply.
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Analysts say Trump meeting with Xi in person ahead of the cut-off would
make a meaningful deal more likely, but had flagged the difficulty of
matching schedules with the US president flying to Vietnam to meet North
Korea’s Kim Jong Un later this month.
“While progress has been made in these fraught negotiations, the two sides
still remain some way from a deal, denting market sentiment,” said Mahony.
Top White House economist Larry Kudlow further doused expectations by
saying Washington and Beijing are a “sizeable distance” apart in talks.
The imposition of the tariffs could weaken the global economy after a
brief rally at the start of 2019, economists say.
Tokyo closed down two percent, although Sony bucked the trend to soar more
than four percent after announcing a plan for share buybacks worth up to 100
billion yen ($910 million).
– Gloomy outlook –
Global stocks had already tumbled on Thursday after the European
Commission slashed its eurozone growth forecast for this year on an
unexpected slowdown in Germany, Brexit woes, tensions over lacklustre growth
prospects in Italy, and French protests.
The commission, the EU’s executive arm, is now expecting growth of 1.3
percent in the eurozone this year, a significant cut from 1.9 percent
predicted in November.
The pound was little changed the day after EU President Donald Tusk warned
that there was “no breakthrough in sight” in Brexit talks, while the Bank of
England warned the UK economy was “not prepared” for a potential no-deal
Brexit.
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