By Victor Reklaitis, MarketWatch
Europe’s main stock gauge finished little changed Monday, with analysts citing uncertainty over global trade tensions. Trading could be somewhat muted as U.S. investors take a break for Labor Day.
What are markets doing?
The pan-European gauge is showing a decline of nearly 2% for the year to date.
Germany’s DAX 30 /zigman2/quotes/210597999/delayed DX:DAX -1.16% shed 0.1% to end at 12,346.41, while France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -1.13% tacked on 0.1% to 5,413.80. The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.62% rose 1% to end at 7,504.60, getting a lift from the pound’s /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.1096% tumble, which came as a key European Union official criticized Britain’s Brexit plan.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.3532% bought $1.1621, up slightly from $1.1604 late Friday in New York.
What is driving the market?
Trade talks between the U.S. and its partners have been a source of volatility for global markets in recent months. The spotlight lately has been on the Trump administration’s stance toward Canada.
Over the weekend, President Donald Trump tweeted that there is no overriding political imperative to include Canada in a revamped version of the North American Free Trade Agreement.
His comments come after a tentative deal with Mexico to rewrite Nafta appeared to signal that the White House is willing to compromise on its hardline demands and avert ruinous trade wars.
What are strategists saying?
“If it turns out to be true that President Trump doesn’t even want a deal, then last week’s optimism could well soon give way,” said Michael Hewson, chief market analyst at CMC Markets UK, in a note.
“As we head into a new week and month, it is these concerns that will remain front and center of investors’ minds, along with increasing concerns about stability in emerging markets,” Hewson added, referring to worries about trade tensions as well as Turkey and Argentina, whose currencies have tumbled.
Shares in Dechra Pharmaceuticals PLC /zigman2/quotes/209485565/delayed UK:DPH +0.98% dived 21% for the Stoxx 600’s biggest drop after the company, which produces pharmaceutical products for animals, said its pretax profit rose modestly as increased costs largely balanced out revenue growth.
WPP PLC’s stock /zigman2/quotes/202300097/delayed UK:WPP -2.80% finished down 0.2%, giving up a modest morning gain that came after the advertising giant picked Mark Read as its new CEO, placing a company veteran at the helm following the departure of founder Martin Sorrell.
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