European stocks drift as investors await Italian government formation

European stocks drift as investors await Italian government formation

LSE London Stock Exchange
Logo of the London Stock Exchange.

LONDON: Europe's stock markets drifted on Monday (May 14) as investors awaited the formation of a right-wing coalition government in Italy.

US stocks meanwhile inched a little higher, encouraged by President Donald Trump saying Washington could ease sanctions on Chinese telecoms equipment manufacturer ZTE.

This soothed some investor nerves which had been rattled by fears of conflict over trade and new sanctions against Iran.

"Global trade uncertainty is festering but comments and developments pertaining to US and Chinese tensions are relatively positive," said analysts at the Charles Schwab brokerage.

In Italy, a deeply eurosceptic far-right party and an anti-establishment group are set to unveil later Monday a coalition government agreement and name a new prime minister, following two months of political deadlock.

The leaders of the anti-immigrant League party and the Five Star Movement will meet the Italian president to share details of a government programme for the eurozone's third largest economy.

TRADE IN FOCUS

Investors will be keeping a close eye on US-China trade discussions, with President Xi Jinping's top economics official and Vice Premier Liu He visiting Washington.

Hopes that the two sides can avert a trade war were boosted on Sunday when US President Donald Trump said he was working with Xi to prevent telecom giant ZTE from going out of business after it was hit by a US sales ban.

The US leader tweeted that he had asked officials to come up with a rescue plan, saying too many jobs were at risk, seeming to offer an olive branch.

"Global trade tensions remain in focus but comments and developments regarding the US and Chinese relations appear to be fostering some cautious optimism," Charles Schwab analysts said in a note.

Key figures 1545 GMT:

New York - Dow: UP 0.5 per cent at 24,948.41 points

London - FTSE 100: DOWN 0.2 per cent at 7,710.98 (close)

Milan - FTSE MIB: UP 0.3 per cent at 24,221 (close)

Frankfurt - DAX 30: DOWN 0.2 per cent at 12,977.71 (close)

Paris - CAC 40: FLAT at 5,540.68 (close)

EURO STOXX 50: FLAT at 3,165.74

Tokyo - Nikkei 225: UP 0.5 per cent at 22,865.86 (close)

Hong Kong - Hang Seng: UP 1.4 per cent at 31,541.08 (close)

Shanghai - Composite: UP 0.3 per cent at 3,174.03 (close)

Euro/dollar: UP at US$1.1972 from US$1.1943 at 2100 GMT

Pound/dollar: UP at US$1.3589 from US$1.3542

Dollar/yen: UP at 109.59 yen from 109.39 yen

Oil - Brent North Sea: UP 81 cents at US$77.93 per barrel

Oil - West Texas Intermediate: UP 25 cents at US$70.95 per barrel

Source: AFP/de

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