European stocks shifted lower Tuesday, amid rising doubts over whether the world’s two largest economies will be able to resolve their trade differences.
The pan-European Stoxx 600 was down 0.7 percent during deals, with most sectors and major bourses in negative territory.
Europe’s autos sector, which has been the most sensitive to trade war fears in recent months, led the losses, down almost 2.5 percent Tuesday. France’s Faurecia was the worst sectoral performer, with shares down 6.6 percent after Jefferies cut its target price for the stock. One in four automobiles is equipped by parts made by Faurecia.
The technology sector was also a big loser, falling 1.4 percent. Chip-makers are also heavily exposed to China and AMS and Siltronic dipped around 5 and 8 percent respectively.
U.K. Telecoms firm BT had better fortunes, rising more than 2 percent after a Goldman Sachs upgrade to to “Buy” from “Neutral.”
European stocks fell additional pressure as both the euro and pound moved higher. Those currencies enjoyed attention after a lawyer advised Europe’s top court that the U.K. could end Brexit without seeking the permission of others.
But market focus was mainly attuned to global trade developments, after news of a temporary trade truce between the U.S. and China had sparked a global rally in equity markets in the previous session.
The political deal, agreed over a working dinner between President Donald Trump and President Xi Jinping on Saturday evening, should see both sides hold off on imposing additional charges against each other’s goods in the short term.
However, confusion over the exact timing of the tariffs cease-fire soured investor sentiment overnight. One White House official said a 90-day period to resolve lingering Sino-U.S. trade disagreements would start on December 1, Reuters reported, whereas White House Economic Adviser Larry Kudlow told reporters it would start from January 1.
Stateside, lingering worries around U.S.-China trade sent jitters down Wall Street.
The Dow Jones Industrial Average fell 208 points, led by losses in Apple. Shares of Apple dropped 2.1 percent after HSBC downgraded the company’s stock to hold from buy as it faces “the reality of market saturation.” The S&P 500 declined 0.8 percent as the financials sector lagged. The Nasdaq Composite also dropped 1 percent.
Meanwhile, oil prices took a breather after surging more than 4 percent at the start of the trading week. The gains come ahead of a critical OPEC meeting on Thursday, with energy market participants widely expecting the influential oil cartel and its allies to orchestrate a fresh round of production cuts.