Europe stocks seen mixed as trade war fears continue
European stocks were seen mixed Wednesday morning as the escalating threat of a trade war between the U.S. and China continues to weigh on major markets.
The pan-European STOXX 600 index dropped 0.14% after the bell, with the travel and leisure sector starting the session as the biggest loser, down 0.88%, while tech stocks climbed 0.5%.
Despite the news that Chinese Vice Premier Liu He would travel to Washington on Thursday, fears have been growing that the proposed trade deal between the two economic powers is unraveling. Tuesday saw markets continue to tumble as investors monitored trade developments between the U.S. and China, with Europe’s banking stocks taking a hit of more than 2%.
Stocks also declined across the Asia Pacific region, with Chinese shares mixed while indices in Japan, Hong Kong, South Korea and Australia all traded lower.
Stateside, investors will continue to monitor developments between Washington and Beijing closely after the Dow dropped 470 points overnight in its sharpest decline since early January, while the S&P 500 shed 1.65% and the Nasdaq Composite dropped 1.96%.
Back in Europe, political uncertainty continued Tuesday as the U.K. Conservative government resumed its negotiations with the main opposition Labour Party in bid to break parliamentary deadlock over the U.K.’s departure from the European Union. Sterling slid to a day’s low in afternoon trade amid low expectations for the talks.
France suggested international sanctions could be reimposed on Iran if it reneges on commitments under its nuclear deal, Reuters reported, after Tehran said it would scale back its compliance a year after Washington pulled out.
Meanwhile, Italy accused the EU of prejudice after grim economic forecasts suggested the Italian economy would grow 0.1% this year, lagging the rest of the bloc.
In corporate news, Dutch supermarket operator Ahold Delhaize reported a first-quarter rise in net income of 2.4%, lifted by solid growth in online sales in the Netherlands.
Siemens posted better-than-expected adjusted operating profit from its industrial business Wednesday morning, with profit rising 7% to 2.4 billion euros ($2.69 billion) in the three months to March 31, beating estimates of 2.24 billion euros in an Infront data poll.
Commerzbank reported first-quarter revenue 2.16 billion euros, down 2.8% compared to the same period last year. The bank’s operating profit fell 5.6% to 244 million euros.
Munich Re reported first-quarter net profit was down 23% as a result of higher claims. The reinsurer’s stock fell 2.9% in morning trade.