Modupe Gbadeyanka
By Investors Hub
European markets are mostly lower on Wednesday amid renewed concerns about the U.S.-China trade war after U.S. President Donald Trump threatened to impose even higher tariffs on Chinese goods if a trade deal is not made between the two countries. Ongoing protests in Hong Kong have also weighed on sentiment.
After some positive news during the course of the previous week and over the weekend about the two countries closing in on an interim trade deal, optimism about a trade deal faded on Monday after it was reported that Trump is reluctant to roll out tariff cuts.
Now, with the U.S. President coming out with a threat to impose even higher tariffs on Chinese goods, investors are worried about further delays before the two countries agree on a pact.
While the U.K.?s FTSE 100 Index has slumped by 0.9 percent, the German DAX Index is down by 0.6 percent and the French CAC 40 Index is down by 0.3 percent.
In Germany, Wirecard shares have come under pressure after Ernest Young auditors refused to certify the 2017 annual balance sheet of Wirecard’s Singapore subsidiary.
Deutsche Bank, Continental, Infineon, Fresenius, Bayer, Covestro, Lufthansa, BASF, BMW and Volkswagen are also posting notable losses.
In the French market, Accor, ArcelorMittal, Renault, Essilor, Societe Generale, Schneider Electric, Saint Gobain and Total have declined sharply.
U.K. stocks are notably lower with trade war worries outweighing some upbeat corporate earnings reports and prompting investors to exit counters.
Among the stocks in the key index, Kingfisher, SAGE Group, Aviva, Pearson and 3i Group are sharply lower.
NMC Health, Taylor Wimpey, Legal & General, Tui, DCC, Rolls Royce Holdings, Rio Tinto, Prudential and Standard Chartered are also down with notable losses.
On the economic front, Germany producer prices declined for the second straight month in October largely driven by energy prices, data from Destatis showed.
Producer prices fell by 0.6 percent year-on-year in October, bigger than the 0.1 percent drop in September. This was the second straight decrease. Economists had forecast an annual 0.4 percent decrease.
On a monthly basis, producer prices dipped 0.2 percent, in contrast to a 0.1 percent increase in September. Prices were forecast to rise 0.1 percent.
The European Central Bank said in its Financial Stability Review that the euro area financial stability environment remains challenging and non-banks have increased their exposure to riskier assets to address profitability challenges.
The bank noted that investment funds and insurers increased their investment in high yield securities. The search for yield led them to assets of emerging market economies.
The central bank said signs of excessive risk-taking in some sectors require monitoring and targeted macro-prudential action in some countries.
