European Stocks Fall as `Morning After' Subdues Trade Optimism
(Bloomberg) -- European shares dropped and U.S. stock index futures pointed to a lower open as Monday’s optimism was replaced by renewed uncertainty.
Investors had to resort to hunting for clues on any U.S.-China trade deal details after confusing signals. Oil rallied for a second day ahead of Thursday’s OPEC meeting in Vienna to decide on 2019 oil production.
“Financial markets seem to be having a ‘morning after’ feeling after the handshake trade deal between China and the U.S.,” UBS Wealth Management global chief economist Paul Donovan wrote in a note. Donavan cited “vague” comments by President Donald Trump’s economic adviser, who said there is no specific agreement with China on auto tariffs.
The Stoxx Europe 600 fell as much as 0.5 percent with the autos sector at the bottom of the pack, falling 1.9 percent. Hella and Valeo were among the worst performers on the SXAP index as European automotive shares slipped following recommendation cuts by Jefferies.
Italy, its budget and the European Union continued to be the cause of speculation, amid conflicting reports about the direction of negotiations. That also meant a continued focus on any stocks affected by the stand-off with the EU, including the country’s banking sector.
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