European stocks traded cautiously higher after President Donald Trump said that trade talks with China, which had stalled in May, have “already begun”
European stocks traded cautiously higher on Tuesday after President Donald Trump said that trade talks with China, which had stalled in May, have “already begun” following his meeting with Chinese President Xi Jinping at the weekend.
The pan-European Stoxx 600 was up 0.1% midway through the morning session, with food and beverage stocks gaining 1% while autos led losses with a 0.8% fall.
Trump said Monday that trade talks were back underway between the world’s two largest economies after the leaders met on the sidelines of the G-20 summit in Osaka, but added that any deal would need to be somewhat tilted in Washington’s favour.
Stocks in Asia mostly edged up in Tuesday afternoon trade, Hong Kong’s Hang Seng index leading gains with a 1.35% jump on its return to trade after a holiday on Monday. Meanwhile, the Reserve Bank of Australia (RBA) slashed its cash rate to an all-time low.
Just days after reaching a truce in the U.S.-China trade war, the White House went on to ratchet up pressure on Europe Monday, proposing $4 billion in potential additional tariffs on European Union goods amid a long-running dispute over aircraft subsidies. The U.S. Trade Representative’s office listed olives, Italian cheese and Scotch whisky among those which could be hit with tariffs.
Focus in Europe will also be on the EU’s third consecutive day of discussions over who should take the bloc’s top jobs until 2025. Leaders from the 28 member states were embroiled in exhaustive talks Monday which resulted in Italy and eastern European states blocking Dutch former Foreign Minister Frans Timmermans from replacing Jean-Claude Juncker at the helm of the EU Commission.
PMI data released on Tuesday showed that U.K. construction activity suffered its sharpest downturn in over a decade in June on the back of rising Brexit concern, causing the British 10-year government bond yield to fall to its lowest level since October 2016.
In corporate news, British giant WPP announced Monday that it is in exclusive talks to sell a majority stake in data analytics unit Kantar to private equity firm Bain Capital. The $4 billion deal is intended to steer the world’s biggest advertising company back to growth. WPP’s stock fell 1.9% by mid-morning.
Galapagos NV saw its shares rise 6.7% during morning trade after announcing that U.S. collaborator Gilead is to submit a new drug application to the U.S. Food and Drug Administration (FDA) this year.
At the other end of the European blue chip index, British asset management company Jupiter fell 6.8% after news that star European fund manager Alexander Darwall will quit to launch his own investment boutique.