European stocks dipped on Tuesday, weighed down by Swiss bank UBS, as investors stayed on edge ahead of developments from the second day of high-stakes US-China trade negotiations.
The continent-wide STOXX 600 was down 0.2% at 552.41 points, as of 0818 GMT.
The spotlight remains on the talks in London between the world’s two biggest economies, after US President Donald Trump on Monday put a positive spin on the talks but did not divulge any details.
Investors closely monitor for signs of progress or easing in the trade war, which has threatened global supply chains and economic growth.
“Markets are taking a more upbeat tone on hints of progress but this is going to underpin choppy price action as there’s a lack of clarity on what an actual deal could be,” said Laura Cooper, head of macro credit and investment strategist at Nuveen.
“Until we see a substantial trade deal emerge, attention will be on the end of that 90-day pause and its implications if there isn’t a deal in place.”
Shares of financial services-linked companies fell 1.2%, led by UBS, as investors reacted to Swiss government proposals that would require the bank to hold an additional $26 billion in capital.
UBS shed nearly 4%, erasing gains posted on Friday, as Swiss markets reopened after a holiday closure on Monday.
Defence stocks also traded lower, with the sub-index at its lowest point in more than a week. “There’s a bit of this valuation story at play to prompt this pullback and some profit taken, but the broad European rotation still has legs,” said Cooper.
Energy stocks rose nearly 1%, supported by gains in oil prices. Shares of healthcare companies advanced 0.5%, led by Novo Nordisk, which gained about 3% following a report that activist hedge fund Parvus Asset Management is building a stake in the drugmaker.
Europe’s equities ease as US-China trade talks grip markets
Vaccine makers such as AstraZeneca and Sanofi also climbed, despite the US health secretary dismantling the vaccine advisory committee.
Most regional indexes were higher, with London’s FTSE among the biggest gainers.
Data showed British pay growth slowed sharply in the three months to April, while unemployment hit its highest levels in nearly four years, strengthening the case for an interest rate cut by the Bank of England.
Bellway gained 4.1% after the British homebuilder raised its forecast for full-year volume production. Shares of Aberdeen gained 7.5%, topping the STOXX 600, after J.P.Morgan upgraded the fund manager’s stock to “overweight” from “neutral”.
Comments
Comments are closed for this article.