EUROPE MARKETS: European Stocks Stage Recovery, But U.S.-China Trade Tensions Remain
June 20 2018 - 12:31PM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
Tobacco stocks rise on ratings call
European stocks on Wednesday bounced off a nearly three-week
low, staging a recovery as traders came to terms with the further
deterioration in the trade relationship between the U.S. and China
that sent equities world-wide tumbling in the prior session.
How markets are performing
The Stoxx Europe 600 Index rose 0.3% to close at 384.29, partly
recovering from a Tuesday drop of 0.7%
(European%20stocks%20finish%20at%203-week%20low%20as%20U.S.-China%20trade%20tensions%20escalate)
that marked its lowest close since May 31.
Germany's DAX 30 index climbed 0.1% to 12,695.16, following the
previous session's 1.2% retreat. France's CAC 40 index ended 0.3%
lower at 5,372.31.
The U.K.'s FTSE 100 rose 0.3% to 7,627.40.
The euro traded slightly lower at $1.1585, from $1.1589 late
Tuesday in New York.
What's driving markets
A measure of calm was returning to equity markets, even though
the U.S. and China were still locking horns on trade issues.
The Trump administration accused China of waging a systematic
campaign of "economic aggression" in a report released Tuesday
(http://www.marketwatch.com/story/navarro-report-blasts-china-for-systematic-economic-aggression-2018-06-19),
which followed U.S. President Donald Trump's indication that he
wants his administration to hit China with further tariffs on $200
billion in imported goods. Trump was responding to Beijing's threat
to retaliate against U.S. tariffs with its own levies on another
batch of U.S. products
(http://www.marketwatch.com/story/china-threatens-further-tariffs-on-us-products-as-trade-conflict-escalates-2018-06-19).
Read:China can't match Trump in a tariff fight, but it does have
other weapons
(http://www.marketwatch.com/story/china-cant-match-trump-in-a-tariff-fight-but-it-does-have-other-weapons-2018-06-19)
Also:Escalating U.S.-China trade spat comes at a bad time for
global growth, economist says
(http://www.marketwatch.com/story/escalating-us-china-trade-spat-comes-at-a-bad-time-for-global-growth-economist-says-2018-06-15)
"The markets have been trading on the same piece of general
trade war news for a while, as a result selling exhaustion has
started to set in," leading Asian stocks to rise and European
equities to trade higher, said Jasper Lawler, head of research at
London Capital Group, in a note.
"Any fresh news of retaliation could see traders snatch risk
back off the table quickly," he said.
Investors are also watching developments from ahead of a meeting
of Organization of the Petroleum Exporting Countries and other
major producers, who are gathering in Vienna
(http://www.marketwatch.com/story/what-time-is-the-opec-meeting-2018-06-19).
While meetings are set for Friday and Saturday, OPEC Secretary
General Mohammad Barkindo on Wednesday delivered his opening speech
for the group's International Seminar, and oil ministers have
started making comments on the sidelines. Oil prices were up more
than 2%, above $66 a barrel.
See:What time is the OPEC meeting?
(http://www.marketwatch.com/story/what-time-is-the-opec-meeting-2018-06-19)
And read:Why Goldman Sachs still sees oil peaking above $82 a
barrel this summer
(http://www.marketwatch.com/story/why-goldman-sachs-still-sees-oil-peaking-above-82-a-barrel-this-summer-2018-06-18)
Meanwhile in the U.K., lawmakers in the House of Commons voted
against an amendment to the Brexit bill that would have given
parliament a "meaningful vote" on the final divorce agreement.
Wednesday's vote was seen as an important victory for U.K. Prime
Minister Theresa May after the House of Lords on Monday voted in
favor of giving parliament more say on the final deal.
Stock movers
Imperial Brands PLC (IMBBY) (IMBBY) rose 3.2%, and British
American Tobacco PLC (BATS.LN) gained 2.4%, with Liberum starting
coverage on the tobacco producers with buy ratings.
Berkeley Group Holdings PLC (BKG.LN) dropped 5.9% after the U.K.
home builder said it expects profit to be around 30% lower in
fiscal 2019
(http://www.marketwatch.com/story/berkeley-group-foresees-lower-profit-2018-06-20)
and that pretax profit in fiscal 2018 represented a peak.
Etablissementen Franz Colruyt NV (COLR.BT) shares rose 3.7%
following the Belgian retailer earnings report.
(END) Dow Jones Newswires
June 20, 2018 12:16 ET (16:16 GMT)
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