Business World

Tuesday 18 June 2019

European tumble halts talks rally

Traders work on the floor of the New York Stock Exchange. Photo: Reuters
Traders work on the floor of the New York Stock Exchange. Photo: Reuters

Reuters

European shares fell yesterday as optimism over US-China trade talks faded and a slew of weak earnings reports hit car and retailer stocks.

The falls snapped a two-day rally that had taken European stocks to three-week highs.

China's commerce ministry said trade talks made progress on "structural issues" such as forced technology transfers and intellectual property rights, but investors were not convinced.

"Overnight the Chinese Commerce Ministry said talks were 'extensive... deep... detailed', but other reports suggest the talks got bogged down when issues cut across Chinese national security and/or Chinese subsidies to state companies," said Chris Bailey, European strategist at Raymond James.

Corporate results, which were poor across the board, offered scant comfort.

But valuations may now offer opportunities.

"After a weeks-long roller coaster for global equities, valuations have de-rated in line with past bear markets, and sentiment has taken a hit," wrote Goldman Sachs analysts.

"With equities already pricing a very negative outlook, we think this points to a risk rally - especially if global growth holds up as we expect."

In Ireland, the Iseq Overall Index was 0.2pc lower at 5,723 shortly before the close.

Miner Kenmare Resources was up 5.8pc at €2.18 on the back of strong production. Bulmers-maker C&C was 5pc higher at €3.10 soon before the end of the session.

The UK's Ftse-100 was 0.4pc ahead as the end of trading neared. Germany's Dax was up 0.1pc. France's CAC-40 was down 0.3pc.

Irish Independent

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