Euro Stocks Slumped on Dwindling Hopes for Trade Deal

LONDON, U.K. – European stock market dipped as hopes that the trade talks between the US and China will reach an agreement before 2019 ends.

On Thursday’s trading session, Euro stocks considerably dropped on growing concerns in the market about the US and China not imminently come to a trade agreement. The Stoxx Europe 600 weakened by about 0.38%, dropping the value towards 402.28. The German DAX, on the other hand, moderately fell by about 0.18%, valuing it to 13,134.55.

The UK FTSE 100 index also experienced a considerable 0.46% decline, going down towards the 7,228.81 points, with the French CAC 40 index dipping about 0.28%, dropping its current value to 5,877.71.

Market players have grown considerably concerned that the trade negotiations between the US and China wouldn’t be able to agree to an interim trade deal this year. Further, the democracy bill for Hong Kong that the House of Representatives in the US is passing has weighed in on the sentiment on the ongoing trade talks.

According to Liu He, vice-premier of China, commenting about the ongoing trade negotiations between two of the biggest economies in the world, he is cautiously optimistic that phase one on trade talks will soon be finalized. On the other hand, He also said that China is a bit confused about the demands from Washington in regards to the negotiations. Based on reports, China’s vice premier has reportedly sent an invitation for trade talks in Beijing towards his US counterpart.

On the other hand, despite the consecutive losses for the Stoxx 600, it has gained up to 19% for 2019. However, the asymmetric risk/reward profile of the index at the end of the year cycle has made equity strategists at the Societe Generale a bit uncomfortable.

On Euro stocks, the Royal Mail, after the postal delivery firm reported that they are “behind schedule” in their transformation plan, has fallen a considerable 16.6% on the share price. According to an analyst, the forecast for UK parcels in both international and the letters division is expected to break even or continue the downtrend in 2021.

On the other hand, the General Logistics Systems delivery service unit of Royal Mail has reported an increase of about 17% on operating profit.

The Thyssenkrupp (TKA) also fell about 10.5% after it has reported over a 30% drop in their adjusted sales in the fourth quarter. On the other hand, the British American Tobacco (BATS) tracked a 3.2% increase on stocks and a 0.09% gains for the Imperial Brands (IMB).