European shares close mixed on dampened trade hopes, Hong Kong escalations

European shares traded mixed Monday amid a dampening of optimism over U.S.-China trade talks, after President Donald Trump denied that he had agreed to roll back tariffs on Chinese goods.

The pan-European Stoxx 600 index closed provisionally virtually unchanged. Basic resources stocks, with their heavy exposure to China, slipped over 1 percent.

Hopes of trade progress rose on Thursday when China’s Commerce Ministry said Beijing and Washington had agreed to lift existing tariffs on one another’s goods, but Trump on Friday said he had not agreed to any rollbacks.

A flaring up of tensions in Hong Kong also weighed on investor sentiment. Protesters were injured Monday after local police opened fire with live rounds, while a group of pro-democracy lawmakers was arrested in the city.

On Wall Street, the Dow Jones Industrial Average slipped over 100 points while the S&P 500 and Nasdaq indexes were also in the red.

Back in Europe, Spanish Prime Minister Pedro Sánchez’s Socialists emerged victorious in the country’s second parliamentary election of the year, but the far-right Vox party doubled its seats, setting the stage for difficult government discussions.

On the data front, official data Monday showed that U.K. GDP (gross domestic product) grew by 0.3 percent in the third quarter, meaning the British economy avoided slipping into a technical recession after contracting by 0.2 percent in the second quarter.

U.K. manufacturing output fell by 0.4 percent in September compared to August, a 1.6 percent drop from September 2018.

Italian industry output fell in 0.4 percent in September, reversing an increase of the same scale in August and indicating the frailty of growth in Europe’s third-largest economy.

In terms of individual stocks, British baker Greggs surged 16.8 percent to lead the Stoxx 600 after posting strong sales growth and upgrading its 2019 profit forecast.

At the other end of the European blue chip index, London-based insurance group Beazley fell 5.6 percent after UBS cut its price target for the stock. while Danish jeweler Pandora saw its shares slip 2.2 percent due to its exposure to Hong Kong and the latest escalation of violence in the city.

Source: CNBC