Stocks - Europe Lower Amid Nervousness Ahead of Trump Statement

By Peter Nurse 

Investing.com - European stock markets sold off Friday, amid nervousness over increasing Sino-U.S. tensions and ahead of President Donald Trump’s response to China's tightening of its control over the city of Hong Kong, a major financial hub.

At 4:10 AM ET (0810 GMT), the DAX in Germany traded 1.5% lower, France's CAC 40 fell 1.3%, while the U.K.'s FTSE index was down 1.0%. 

American relations with Beijing have been on edge since the Covid-19 pandemic reared its head, and President Trump is set to hold a news conference later on Friday after China's parliament on Thursday pressed ahead with new national security legislation for Hong Kong, raising fears over the future of its democratic freedoms.

A fresh trade war between the two largest economies in the world would place European governments in a difficult position over how to respond as they shift from battling the coronavirus to economic recovery, where trade with China is likely to play a big part.

Ahead of President Trump’s statement, economic news out of Europe showed some improvement, admittedly from a low base. 

France's economy contracted less than initially thought in the first quarter, with the euro zone's second biggest-economy contracting 5.3% in the first three months of the year from the previous quarter, INSEE said, revising its initial estimate of a 5.8% fall.

Also, German retail sales dropped by 5.3% in April, falling at their fastest pace since 2007, but the reading was much better than the 12% fall widely expected.

In corporate news, Renault (PA:RENA) slumped 3.5% after the French carmaker announced it would cease assembling vehicles at several plants in France as it cuts some 15,000 jobs worldwide.

AstraZeneca (NYSE:AZN) climbed 1.4% after the drug maker reported strong results for a Phase III trial of its Tagrisso lung-cancer drug. 

Elsewhere, JDE Peet’s stock jumped 11% at the start of trading on Euronext in Amsterdam, after the world’s No. 2 maker of packaged coffee became one of the few big companies to go public during the coronavirus crisis. 

Oil prices were under pressure Friday, after government data showed late Thursday an unexpected rise in U.S. inventories of 7.9 million barrels, backing up Wednesday’s report by the American Petroleum Institute.

At 3:50 AM ET, Crude Oil WTI futures traded 3% lower at $32.69 a barrel. The international benchmark Brent contract fell 2.4% to $35.16.

Elsewhere, gold futures rose 0.2% to $1,717.70/oz, while EUR/USD traded at 1.1093, up 0.2% on the day.