By Sara Sjolin, MarketWatch
European stocks finished lower Thursday after U.S. President Donald Trump pulled out of what would have been a historic meeting with North Korea, citing “open hostility” from the nation’s officials.
Deutsche Bank shares slumped after calls for the chairman to resign.
What are markets doing?
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -2.00% lost 0.5% to close at 390.54, after logging its worst one-day percentage fall since March 22. The pan-European benchmark on Wednesday ended down 1.1% as traders fretted about weak eurozone data and the renewed prospect of a China-U.S. trade war.
Italy’s FTSE MIB index /zigman2/quotes/210598024/delayed IT:I945 -1.55% fell 0.7% to 22,749.08, erasing an earlier advance of as much as 1% which had put it among Europe’s best performing indexes on Thursday.
The U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX -2.25% dropped 0.9% to 7,716.74. The blue-chip benchmark turned lower as the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.2054% rallied on the back of a better-than-expected retail sales reading for April. Sterling bought $1.3374, compared with $1.3348 late Wednesday in New York.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.3628% rose to $1.1747, from $1.1699 on Wednesday.
In Turkey, the lira /zigman2/quotes/210561895/realtime/sampled USDTRY +0.1727% resumed its slide, even after the Turkish central bank on Wednesday intervened to halt the currency’s drop. The dollar bought 4.7438 lira, up from 4.5762 late Wednesday in New York.
What is driving the markets?
European stocks had traded close to the flat line most of Thursday, but were sent firmly lower in the afternoon after Trump called off a planned summit meeting with North Korean leader Kim Jong Un that was due to take place on June 12 in Singapore. Trump said it was inappropriate to go ahead with the meeting based on the “tremendous anger and open hostility” displayed Kim’s most recent statements.
“The World, and North Korea in particular, has lost a great opportunity for lasting peace and great prosperity and wealth. This missed opportunity is truly a moment in history”, Trump said in a letter to the North Korean leader .
In separate Trump news, the U.S. president rekindled concerns about a global trade war by announcing an investigation that could lead to U.S. import tariffs on cars. The news weighed on Europe’s car makers, and the Stoxx Europe 600 Automobiles & Parts Index /zigman2/quotes/210599241/delayed XX:SXAP -1.94% fell 1.8% in Thursday’s action.
Meanwhile, stocks in Italy bounced around after President Sergio Mattarella late Wednesday gave little-known law professor Giuseppe Conte a formal mandate to form a government, potentially ending 11 months of political gridlock.