European shares dip as investors seek signs of trade deal progress
European shares were slightly lower on Tuesday after a strong start to the week, as investors sought concrete signs of progress in U.S.-China trade talks, while London’s Compass Group tumbled after signalling softness in its European business.
Compass Group Plc fell as much as 7.8% after the company said deteriorating consumer confidence in Europe had hurt margins at its unit that provides catering services to companies.
The stock, on track for its worst day in more than five years, pushed the wider travel & leisure sector down 2% and was the biggest drag on the pan-European STOXX 600 index.
The benchmark index was down 0.2%, after gaining more than 1% on Monday, in its best day in more than a month, following a report that Washington and Beijing were close to a trade pact.
China said on Tuesday top trade negotiators from both countries had reached a consensus on “resolving relevant problems” on a phone call, but gave no indication about the timing of a deal, which was expected to be signed in November.
“We’ve seen this many times in the last couple of months, that they’re in trade talks once in a while (but) the problem is that they’re still miles apart in what they want,” said Timme Spakman, macro economist at ING Bank.
The STOXX 600 index has climbed to four-year highs this month on growing hopes that the world’s top two economies would settle the trade dispute, which has posed the biggest risk to global growth this year.
Trade optimism has also powered Germany’s export-heavy index to a near two-year high, despite a clutch of recent economic data showing manufacturing activity in Europe’s biggest economy was stuck in a recession.
To propel future growth, European Central Bank Chief Christine Lagarde last week called on euro zone governments to strengthen domestic demand, as a resolution to the trade war remains elusive.
Shares of French car parts maker Faurecia jumped 5% to a two-week high as it said it was targeting record sales, profits and cash generation in 2022, partly helped by a boost from its acquisition of Japanese company Clarion.
Britain’s Pets at Home Group Plc rose 9% after the company forecast full-year underlying pretax profit towards the top end of expectations, boosted by higher demand for its pet food and vet services.
Source: yahoo news
