European stocks were in the red on the possibility of a U.S.-China trade deal ahead of the G-20 summit
European stocks flipped into the red on Thursday morning as markets digested different messages on the possibility of a U.S.-China trade deal ahead of the much-anticipated G-20 summit.
The pan-European Stoxx 600 was down 0.3% despite a positive start to the session. Retail stocks bucked the trend to rise 1.4%, buoyed by H&M’s 9.5% jump, while the media sector led losses with a 1% decline as most sectors entered negative territory.
U.S. President Donald Trump said Wednesday that a trade deal with Chinese President Xi Jinping was possible when the two meet this weekend at the G-20 summit in Osaka, but warned that he was prepared to impose tariffs on all remaining Chinese imports if talks fall through.
In Europe, Germany and Italy drove euro zone economic sentiment to its lowest point in three years in June as confidence fell markedly in the bloc’s largest economies, European Commission data revealed on Thursday.
Boris Johnson, the favourite to succeed U.K. Prime Minister Theresa May, said on Wednesday that the chances of Britain leaving the European Union without a deal are “a million-to-one” despite reiterating his promise to exit the bloc with or without a deal by October 31.
Bank of England Governor Mark Carney told the U.K. Treasury Committee that the central bank would be more likely to cut interest rates in the event of a “no-deal” Brexit.
In corporate news, Vodafone is reportedly set to secure EU antitrust approval for its $22 billion bid for Liberty Global’s cable networks in central Europe after offering concessions in May. Vodafone shares rose marginally on the news.
Meanwhile, German chemicals giant Bayer, under pressure from activist shareholders, said Wednesday that it has hired an external lawyer and set up a committee to resolve a multi-billion dollar litigation issue. The company has seen its share price tumble after its $63 billion acquisition of Monsanto brought a raft of legal issues over allegations of a glyphosate weedkiller causing cancer. Bayer shares jumped 7.9% during the morning session.
Swedish retailer H&M saw its share price climb 9.5% after announcing an expansion of its partnership with Swedish bank Klarna into the U.S. The company also reported a slight drop in second-quarter profit, falling just short of market expectations, but said sales of its summer collections were off to a strong start.
Shares of Chr. Hansen plummeted 12% after the Danish bioscience company cut its full-year revenue outlook after posting disappointing profit figures.