By Emily Horton
European markets traded in the red on Thursday, as the U.S. and China are set to brace themselves for a prolonged trade standoff.
In the U.K., Prime Minister Theresa May also faces mounting pressure to quit or be forced out of office for her highly criticized handling on Brexit.
How did markets perform?
Tracking global equity losses, the Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.19% fell by 1.2% to 374.70 on Thursday, after edging down by 0.1% the previous day.
In Germany, the DAX /zigman2/quotes/210223310/composite DAX -0.19% sank by 1.5% to 11,984.36, France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.40% dropped by 1.5% to 5,299.68 and Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 -0.10% fell by 1.5% to 20,265.51.
The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.71% retreated by 1.2% to 7,249.61, after dipping by 0.1% on Wednesday.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.0435% continued to suffer from renewed Brexit uncertainty, with the Prime Minister Theresa May on track to be ousted by her own party in the coming days. Sterling fell to $1.2614, having ended Wednesday at $1.2661.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0417% also struggled, ticking down to $1.1145 compared to $1.1153 the previous day.
What’s moving the markets?
European markets fell Thursday, following on from losses in both Asia and Wall Street, as the U.S. and China look set for an extended trade standoff. After last week’s tariff escalation, no new trade talks have been organized. Ministry of Commerce spokesperson Gao Feng said Thursday that the U.S. must “adjust its wrong actions” if it wants to keep on negotiating with the economic powerhouse, according to translated comments by CNBC.
The U.S. imposed 25% tariffs on $250 billion in Chinese imports and is planning to target another $300 billion. President Donald Trump also banned American companies from selling goods or services to Huawei Technologies Co.’s. Several technology heavyweights in Japan and the U.K. have now dropped the Chinese telecoms group as a result, including Panasonic Corp., ARM Holdings PLC, BT Group’s EE and Vodafone Group PLC /zigman2/quotes/202862751/composite VOD +0.11% .
In the U.K., Prime Minister Theresa May’s leadership is teetering on a cliff edge. Conservative MPs now predict she will be forced out in the next few days, after she failed to rally support for her Brexit agreement for the forth time to date.
Meanwhile, a global summit on Boeing 737 Max is set to take place in Texas on Thursday, to talk about alterations to flight software linked to the two deadly crashes of that plane model, that occurred within five months of each other. Shares in the airline TUI AG /zigman2/quotes/207049334/delayed UK:TUI +5.95% sank by 5%.
Statistics from the Federal Statistical Office showed Thursday the German economy rebounded in the first quarter of 2019, after narrowly avoiding recession late last year, spurred on strong rise in household consumption and a thriving construction sector.
Which stocks are active
Merlin Entertainments PLC jumped to by 6%, after the U.S. activist hedge fund ValueAct Capital released a public letter advising the Legoland park owner to seek a private buyer.
Deutsche Bank AG’s /zigman2/quotes/205584254/delayed DE:DBK +1.42% shares fell 2%. CEO Christian Sewing signalled at the company’s annual general meeting that the investment bank will look to make cuts as it tries to regain support from investors. Shares tapped another record low Thursday.
British water service company United Utilities Group PLC /zigman2/quotes/203908003/delayed UK:UU -0.30% lost 1%, as the firm addressed the uncertainty recently created by the Labour Party’s proposal to renationalize the water industry, the City AM reported .