Europe midday: Stocks holding lower ahead of US jobs data, China announcement
Banca Monte dei Paschi di Siena
€4.47
19:00 18/10/22
Stocks are holding lower after the US president 'upped the ante', opening the door to even heavier US tariffs on Chinese made goods and ahead of the monthly US non-farm payrolls report.
After the close of markets in New York on Thursday, and after China responded to a list of proposed US tariffs with its own, Donald Trump instructed the US Trade Representative to consider whether $100bn of further sanctions would be "appropriate".
That prompted European Central Bank governing council member Benoit Coeure to warn warned that: "If this would move into a full-fledged trade war, this has a potential to have quite damaging consequences for growth and jobs, globally, including in the US."
It also triggered an announcement from China's commerce ministry that it was to hold a media briefing at 1300 BST.
Against that backdrop, as of 1223 BST, the benchmark Stoxx 600 was lower by 0.44% or 1.65 points to 374.48, alongside a 0.63% or 77.29 point fall to 12,228.08 for the German Dax and a dip of 0.17% or 38.88 points to 22,931.61 on the FTSE Mibtel.
From a sector standpoint, the Stoxx 600's Autombiles&Parts subindex was faring worst, retreating 1.84% to 623.20, alongside a fall of 1.83% for a gauge of Basic Resources companies to 445.57.
Currency markets were little changed in reaction to the news out of Washington, with the US dollar index trading flat on the day, but commodities were generally weaker, with copper and agricultural futures falling by the most.
Indeed, as analysts at Goldman Sachs told clients in a research note focused on the metals market: "We acknowledge that there remains significant uncertainty and that tariff talks may continue to drive the market."
Meanwhile, economic news out on the Continent was mixed.
France's trade deficit narrowed slightly in February, slipping from -€5.4bn in January to -€5.2bn in February (consensus: -€5.3bn), as imports declined by 1.4% month-on-month, according to INSEE.
Separately, it was reported that France's current account deficit increased marginally in the fourth quarter to reach 1.2% of gross domestic product.
In Germany on the other hand, the Ministry of Finance said that the country's industrial production shrank by 1.6% month-on-month in February (consensus: 0.2%).
Corporate-wise, Saudi Aramco and Total were expected to ink a deal to expand their joint-venture refinery in the Kingdom, Reuters reported.
On the broker front, analysts at Barclays Research weighed in upgrading their recommendations on shares of Unicredit and Banca Monte dei Paschi di Siena by one notch, to 'overweight' and 'equalweight', respectively.
However, their preferred lenders in that country were Banco BPM and Intesa.