By Dave Morris
European markets rose despite an effective U.S. ban on Huawei telecommunications equipment underscored the potential for ongoing trade tensions with China.
How did markets perform?
The Stoxx 600 (STOXX:XX:SXXP) edged up 0.1% to 378.5. On Wednesday it climbed 0.5%.
The U.K.’s FTSE 100 (FTSE:UK:UKX) climbed to 7,313.7, up 0.2%. It closed 0.8% higher on Wednesday.
The pound (XTUP:GBPUSD) ticked lower by 0.1% to $1.2833. It declined 0.4% Wednesday.
In Germany, the DAX (NAS:DAX) (XEX:DX:DAX) increased 0.2% to 12,128.3, after Wednesday’s increase of 0.9%.
France’s CAC 40 (PAR:FR:PX1) moved up 0.1% to 5,379.2. On Wednesday it closed up 0.6%.
Italy’s FTSE MIB (BORSA:IT:I945) was 0.1% lower at 20,842.5, adding to Wednesday’s fall of 0.1%.
What’s moving the markets?
In a further sign that U.S. President Donald Trump is committed to pressing China in trade negotiations, the president signed an executive order declaring a national emergency and imposing restrictions on the use of equipment from countries considered “foreign adversaries”. This has widely been taken as a move to target Huawei. The Chinese firm makes handsets as well as network infrastructure equipment that companies are eyeing for the rollout of 5G networks. Huawei has been placed on a list of entities engaged in activity contrary to U.S. interests, due to fears it could be used by the Chinese government as an espionage tool. The company denies it poses any threat.
In the U.K., Prime Minister Theresa May is under renewed pressure to set a date for her departure, as attempts to reach a cross party Brexit agreement infuriated backbench Conservative MPs. May will meet Thursday with a committee of Tory MPs who are expected to demand that she either set a date by the end of summer or they will move to oust her in June, though this would require a rule change.
Which stocks are active?
Miners climbed Thursday as analysts were bullish on the prospects for iron ore, which has been advancing since the start of the year. In January, an accident at a Vale mine in Brazil that caused the death of 230 people led to the company reducing supply, sending the price higher. Analysts at Jefferies saw the price remaining elevated based on limited supply and demand from China. Shares in Anglo American PLC (LON:UK:AAL) rose 2.9% BHP Group PLC (LON:UK:BHP) climbed 2.6% and Rio Tinto PLC (LON:UK:RIO) also increased 2.6%.
Burberry Group PLC (LON:UK:BRBY) sank 3.7% after reporting mediocre full-year sales. Same-store sales rose only 2%, and pretax profit rose 6.8% below analysts’ expectations. The company appointed a new creative director last year in an effort to shift its strategy amid weak sales growth in the all-important Chinese market.
Ubisoft Entertainment SA (PAR:FR:UBI) plunged 13% after announcing disappointing full year earnings as well as projections for 2020 that were lower than analysts expected. The videogame maker also announced that the release of the pirate game Skull & Bones would be delayed again. Videogame companies’ share prices are often heavily dependent on the timing of major titles.