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European stocks under pressure as US-China trade talks begin

European stocks under pressure as US-China trade talks begin

From left: US Trade Representative Robert Lighthizer, Chinese Vice Premier and lead trade negotiator Liu He and US Treasury Secretary Steven Mnuchin pose before the opening session of trade negotiations at the Diaoyutai State Guesthouse in Beijing. (AP /Mark Schiefelbein, Pool)

LONDON: European stock markets were under pressure on Thursday (Feb 14) as traders anxiously awaited news from high-level US-China trade talks under way in Beijing.

European indices, which had gained ground earlier, had mostly slipped into the red by the close, and Wall Street was also lower in the late morning in New York.

London, however, managed to eke out a small closing gain thanks to pound weakness which boosts earnings of FTSE-listed multinationals with much income in other currencies.

Earlier, Asian markets had already dropped as traders reacted to a batch of mixed earnings updates.

In company movement, shares in Airbus jumped in Paris after the European plane manufacturer said it would stop building its A380 owing to poor demand for the superjumbo.

READ: Airbus to scrap A380 superjumbo production as sales slump

The announcement was made alongside news that Airbus net profit soared 29 percent in 2018 on strong demand for its smaller planes.

David Madden, analyst at CMC Markets UK, said strong Chinese trade data bode well for talks with the US.

"That fact that China's economy is showing some signs of improvement might mean Beijing will be less susceptible to pressure from the US regarding the trade dispute," he said.

'POSITIVE SIGNALS'

Negotiators have kicked off discussions in the Chinese capital aimed at defusing a row that has already triggered tariffs on billions of dollars' worth of exports and threatened to stymie global growth.

Failure to resolve the dispute would initiate a sharp hike in US tariffs on US$200 billion of Chinese goods, although US President Donald Trump indicated this week he could extend his Mar 1 deadline if progress is made.

Trump told reporters in the Oval Office on Wednesday that preliminary discussions in Beijing had gone "very well", Bloomberg reported, adding that the US president was considering a 60-day deadline extension according to unnamed sources.

"Based on the positive signals from the US-China trade negotiations, further tariff hikes will likely be suspended," noted Louis Kuijs of Oxford Economics, as US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met with China's top economic czar Liu He.

China's trade surplus with the US narrowed in January even as its American imports plunged, buffeted by a slowing economy and the tariff battle with Washington, official data showed on Thursday.

The surplus fell to US$27.3 billion from US$29.9 billion in December.

Key figures around 1645 GMT:

 

London - FTSE 100: UP 0.1 per cent at 7,197.01 points (close)

Frankfurt - DAX 30: DOWN 0.7 per cent at 11,089.79 (close)

Paris - CAC 40: DOWN 0.2 per cent at 5,062.52 (close)

EURO STOXX 50: DOWN 0.6 per cent at 3,182.66

New York - Dow: DOWN 0.4 per cent at 25,434.10

 

Tokyo - Nikkei 225: FLAT at 21,139.71 (close)

Hong Kong - Hang Seng: DOWN 0.2 per cent at 28,432.05 (close)

Shanghai - Composite: DOWN 0.1 per cent at 2,719.70 (close)

 

Euro/dollar: UP at US$1.1281 from US$1.1270 at 2130 GMT Wednesday

Pound/dollar: DOWN at US$1.2794 from US$1.2848

Dollar/yen: DOWN at 110.69 yen from 111.02 yen

 

Oil - Brent Crude: UP 49 cents at US$64.10 per barrel

Oil - West Texas Intermediate: UP 7 cents at US$53.97 per barrel

Source: AFP/de

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