European markets slightly increase as investors monitor trade war escalations
European markets opened higher Thursday after the pan-European Stoxx 600 reached its lowest point since March 11, as investors navigate the latest escalations in the U.S.-China trade war.
The Stoxx 600 rose by 0.3% at the opening bell, led by oil and gas stocks which jumped 1.2%, while utilities were the only sector to open in the red, dropping 0.6% in opening trades.
The Chinese state newspaper Wednesday used the history-laden phrase “don’t say we didn’t warn you,” indicating trade tensions between the world’s largest economies. Chinese Vice Foreign Minister Zhang Hanhui followed this up Thursday by equating U.S. trade provocations to “naked economic terrorism.”
Asian stocks traded mostly lower Thursday afternoon, mainland Chinese indexes leading the losses with the Shenzhen component shedding 1.27%.
The focus of China’s renewed threat has been on its dominance in rare earth minerals, which are crucial to the production of a host of technology products, including iPhones and electric vehicles. The Pentagon is reportedly working to reduce U.S. reliance on Chinese rare earth minerals in light of the threat.
Stateside investors will also be monitoring domestic political developments, after U.S. Special Counsel Robert Mueller said Wednesday that his probe into Russian interference in the 2016 election did not clear President Donald Trump, while Congress weighs impeachment proceedings.
Back in Europe, a poll conducted in Germany on Wednesday revealed that most Germans do not see Angela Merkel’s heir apparent, Annegret Kramp-Karrenbauer, as fit to replace her, denting the party’s hopes for a smooth leadership transition.
A Reuters poll also found that investors remain deterred from scooping up cheap FTSE 100 shares while the U.K.’s drawn out exit from the European Union remains undetermined.
In corporate news, the Financial Times reported that German prosecutors had raided the offices of luxury car manufacturer Porsche in a probe into suspected misuse of corporate funds by the company’s executives. Meanwhile, Nissan CEO Hiroto Saikawa said he sees no major downside of a proposed $35 billion merger of alliance partner Renault with Fiat Chrysler.
source: CNBC
