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June 25, 2019, 7:46 a.m. EDT

European markets down as G-20 preparations begin

By Dave Morris

European stock markets ticked down Tuesday as U.S. and China representatives began signalling ahead of the G-20 summit.

How did markets perform?

The Stoxx 600 (STOXX:XX:SXXP)  dipped 0.1% to 383.4, after edging down 0.3% Monday.

The U.K.’s FTSE 100 (FTSE:UK:UKX)  was 0.2% lower at 7,399.2. On Monday it nudged up 0.1%.

The pound (XTUP:GBPUSD)  is down 0.2% to $1.2759, erasing Monday’s rise of 0.2%.

In Germany, the DAX (XEX:DX:DAX) ticked down 0.1% to 12,265 after sinking 0.5% Monday.

France’s CAC 40 (PAR:FR:PX1)  was at 5,511.6, down 0.2%. It also declined 0.2% Monday.

Italy’s FTSE MIB (BORSA:IT:I945)  fell 0.6% to 21,156.1, following its drop of 0.5% Monday.

What’s moving the markets?

Negotiators for the U.S. and China were preparing the ground for a meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Osaka, Japan. The discussion will be the first time the two have come face-to-face since trade negotiations ended in May without a deal. Representatives of the two sides have exchanged phone calls though details of what they discussed are scarce.

Former U.K. Foreign Secretary Boris Johnson faced rising scrutiny as he campaigned for leadership of the Conservative Party. Johnson, who most pundits and polls expect to become the next Prime Minister, hit back against reports of domestic turmoil with his girlfriend, Carrie Symonds, saying it was none of the public’s business. Scrutiny of his policy platform may prove more damaging if it costs him supporters such as the Institute for Fiscal Studies think tank, which said according to a report in the Financial Times that Johnson’s plan to cut taxes and raise the national insurance contributions threshold was incompatible with ending austerity, as the Conservative government has promised to do.

In economic data, France saw its June survey of the business climate for manufacturing fall short of expectations, coming in at 102 revised versus 103.5 expected.

U.K. retail sales saw their largest year over year decline in a decade, though economists warn that seasonal factors may have driven up the 2018 comparison figure. The CBI monthly retail sales balance figures fell to -42 versus consensus expectations of -10. However, the CBI notes that 2018 was not only the season of the men’s World Cup, it also saw particularly warm weather.

Which stocks are active?

Miners were in positive territory as the prices of several metals rose to multi-year highs. Gold futures touched $1,438 an ounce,  a six year high, before settling at $1432.6/oz. The shiny metal has been boosted by uncertainty around the strength of the global economy and possible central bank action. Meanwhile, the Financial Times reports that supply constraints in the iron ore market have sent it to a five-year high of $108.78. BHP Group PLC (LON:UK:BHP)  shares were 1.2% higher, Anglo American PLC (LON:UK:AAL)  rose 0.7% and Rio Tinto PLC (LON:UK:RIO)  shares were up 0.5%.

The poor U.K. retail data struck shares in supermarkets Tesco PLC (LON:UK:TSCO)  was down 2.3%, while Wm Morrison Supermarkets PLC (LON:UK:MRW)  declined 2%.

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