European stocks flat as tech losses offset data optimism
LONDON: European shares were largely flat yesterday as renewed US-China tensions hit technology stocks, but a slowing decline in China’s producer prices and rising oil prices limited losses. The pan-European STOXX 600 index edged up 0.1 percent at the start of a week that could see subdued trading as traders head out for summer holidays in Europe.
Sectors seen as sensitive to economic health such as banks , oil and gas firms and miners rose after data showed China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels. Energy majors BP, Royal Dutch Shell and Total rose between 0.8 percent and 2.5 percent as crude prices gained after Saudi Aramco raised optimism about Asian demand and Iraq pledged to deepen supply cuts.
Heavyweight technology index fell 1.2 percent, capping gains in the broader market amid worries over the US-China rift ahead of a scheduled trade talks on Aug. 15 to review the agreement signed in January. Dutch tech investor Prosus slid for a third day running as the US prepares ban on two popular Chinese apps, WeChat and TikTok.
“President Trump’s decision is yet another one that could prompt a counter response and possible escalation from Beijing, with US companies operating in Hong Kong and China, particularly vulnerable,” Michael Hewson, chief market analyst at CMC Markets, wrote in a note. With the bulk of earnings season over, investors were monitoring the ongoing negotiations between White House officials and Democrats over a fifth bill to address the economic impact of the coronavirus pandemic. US President Donald Trump on Saturday signed executive orders and memorandums aimed at unemployment benefits, evictions, student loans and payroll taxes.
Meanwhile, a resurgence in COVID-19 cases in Europe was also investors’ radar as Britain on Sunday recorded its highest daily rise in new infections since late June. French engineering company Spie jumped 4.2 percent after a double upgrade to “buy” from Jefferies, while Norwegian energy firm Equinor rose 1 percent after it appointed a company executive Anders Opedal as chief executive officer.
In Britain, fashion retailer Superdry jumped 18.7 percent agreed to a new 70 million pounds ($91.5 million) lending facility, while AA surged 14.6 percent after Sky News reported that Apollo Global Management was weighing a 3 billion pound takeover bid for the roadside recovery group. – Reuters