European markets traded mixed Wednesday as markets tried to rebound from a sell-off Monday resulting from China’s announcement of retaliatory tariffs on U.S. imports.
The pan-European STOXX 600 was flat in the opening minutes of trading, with travel and leisure stocks jumping out to a fast start with a 1% rise, while utilities dropped by 0.8% after the opening bell.
Recent sessions saw a recovery rally across all major markets following a sell-off Monday on the back of China hiking tariffs on $60 billion worth of U.S. goods in an escalation of the trade war between the world’s largest economies.
However, strategists have urged caution as tensions ratchet up, with the Federal Reserve Bank of New York’s gauge of recession probability over the next 12 months now at 27.5%, the highest since the financial crisis. Stateside, investors will continue to monitor ongoing talks after President Donald Trump softened his tone on the trade war Tuesday, referring to it as a “little squabble” and insisting talks had not collapsed.
Back in Europe, the U.K. government announced that Prime Minister Theresa May will bring her Brexit deal back to Parliament in the week of June 3, as talks with the main opposition Labour party continue despite an apparent lack of progress.
Meanwhile, in a substantial piece of corporate news, reports Tuesday suggested Italian bank UniCredit has stepped up preparations to bid for Commerzbank, just weeks after talks a deal with previous suitor Deutsche Bank fell through.
Dutch bank ABN Amro reported a 20% drop in first-quarter net profit to 478 million euros ($536 million). Its stock slipped slightly during opening trade.
Credit Agricole also posted falling first-quarter net profits with an 11% decline to 763 million euros, its stock falling 2.7% in opening trade.
Shares of British lender CYBG jumped 10% at the start of the session after it swung to a first-half profit, while the worst early performer was gas and electricity supplier E.On, which fell 5.5% after Goldman Sachs downgraded the stock from “buy” to “neutral.”