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EUROPE-MARKETS
European markets tread water as trade talks play out
LONDON, Feb 22, 2019 (BSS/AFP) – Eurozone stock markets gave a lacklustre
performance Thursday after gains in much of Asia as traders eyed talks
between China and the US they hope will finally resolve a long-running trade
war.
Frankfurt was a touch higher at the close and Paris ended flat, while
London lost nearly one percent, penalised by a strong pound, which tends to
weigh on the earnings of multinationals, and by poorly-received results
including from British Gas owner Centrica.
– ‘Cooling off’ –
The pound rose against both the dollar and the euro after recovering from
early weakness prompted by Fitch warning that it could slash Britain’s credit
rating owing to the economic hit from a potential no-deal Brexit.
Wall Street shares were lower in the late New York morning trade, weighed
down by “a mixed bag of domestic economic and earnings reports”, according to
Charles Schwab analysts.
“US stocks are cooling off from the sharp rally since the December lows,
with a plethora of economic data appearing to foster global growth concerns
and counter lingering U.S.-China trade optimism,” they said.
In Asia, stock markets mainly climbed on a report that Beijing and
Washington were working on an outline for a deal.
Both sides returned to the bargaining table Thursday, with just eight days
remaining in a self-imposed deadline to avoid an escalation in the trade war.
“Markets look towards the US-China trade talks for direction,” said IG
analyst Joshua Mahony.
– ‘Weariness, scepticism’ –
“Markets are becoming less sensitive to the fact that these talks are
taking place, in some ways reflecting the weariness and scepticism that comes
with each meeting.”
Global equities have enjoyed a stellar start to the year on hopes for the
negotiations and expectations the Federal Reserve will ease up on its pace of
monetary tightening as growth at home and globally slows.
The upbeat mood was enhanced Thursday as Bloomberg News said US and
Chinese negotiators were sketching out a number of memoranda of understanding
on key issues including intellectual property and technology transfer.
Without naming sources, the report said no final agreement was expected in
Washington this week but that China’s top negotiator Liu He would meet US
President Donald Trump on Friday.
While there has been no concrete sign of progress in the trade talks,
Trump has insisted the talks are going “very well” and has indicated he could
push back a deadline for a deal to be done.
BSS/AFP/HR/0955