European stocks fall after US, China take tough trade stances

Thursday, 13 June 2019

European stocks traded lower on Wednesday after the US and China resumed tough stances in their ongoing trade war, reports CNBC.
The pan-European Stoxx 600 was down 0.6 per cent during the afternoon session, oil and gas stocks leading losses with a 1.8 per cent decline, while banks fell 1.2 per cent. Media stocks were the strongest performer with a 0.6 per cent gain.
US President Donald Trump on Tuesday defended the use of tariffs as part of his trade strategy, while China vowed a tough response if Washington insists on escalating trade tensions as the world's two largest economies attempt to negotiate a deal.
Asian stocks slid Wednesday after Wall Street ended a 6-day winning streak overnight, with China's consumer price index rising 2.7 per cent year-on-year. Hong Kong's Hang Seng index led losses with a 1.59 per cent drop by the afternoon as protests continued over the contentious Chinese extradition law.
Back in Europe, both Mario Draghi, the president of the European Central Bank (ECB) and Christine Lagarde, the managing director of the International Monetary Fund (IMF) warned about the global trade dispute Wednesday.
In the UK, Sterling edged towards a three-week high Wednesday as the main opposition Labour party announced plans to introduce parliamentary legislation to block the country exiting the European Union without a deal in place.
In corporate news, French technology giant Dassault Systemes has agreed to acquire Medidata Solutions in an all-cash deal worth $5.8 billion on an enterprise value basis. Dassault shares fell 1.0 per cent by mid-morning.
Senior lawmaker Nicky Morgan, chair of the Treasury Select Committee, requested information from influential British stockbroker Hargreaves Lansdown about its links to the Woodford Equity Income fund, which was suspended last week amid a raft of bad stock calls and investor withdrawals.
Shares of German publisher Axel Springer soared 11.3 per cent after US private equity firm KKR offered to buy out its minority shareholders.
At the other end of the European blue chip index, British American Tobacco (BAT) saw its shares fall 4.6 per cent after warning on Wednesday of steeper declines in global cigarette sales.