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Europe close: Stocks fall back on renewed trade jitters

By Alexander Bueso

Date: Tuesday 04 Dec 2018

Europe close: Stocks fall back on renewed trade jitters

(Sharecast News) - Stocks on the Continent surrendered the bulk of the prior day's gains with some market commentary referencing lingering doubts around the specifics of the trade truce agreed by the US and China at the weekend and even concerns around the outlook for economic growth in the US.
According to reports, it remained unclear whether the truce was to run for 90 days starting from 1 December or 1 January and whether Beijing had in fact agreed to roll-back its tariffs on imports of US autos.

"Away from the relief that an escalation has been averted it still isn't immediately clear what each side has agreed to implement, given some of the claims being made by President Trump around the reducing and removal of tariffs on US made auto imports onto the Chinese mainland," said CMC Markets's Michael Hewson.

"This claim doesn't appear in the declaration over what was agreed by both sides at the weekend, so it's not immediately apparent why the US President believes that China has agreed to this."

In the absence of their leader, Xi Jinping, who was on a state visit to Portugal, Chinese officials had been unable to confirm or deny the various reports that had been circulating.

By the end of trading, the benchmark Stoxx 600 was down by 0.76% or 2.75 points at 358.43, alongside a drop of 1.14% or 130.14 points to 11,335.32 for the German Dax and a fall of 1.37% or 268.93 points to 19,353.43 on Milan's FTSE Mibtel.

In parallel, longer-term US government bond yields were near three-month lows on the back of recent more dovish remarks from central bank officials on the other side of the Atlantic, but some market observers were wary.

On the economic side of thing, factory gate prices in the euro area accelerated last month, rising at a 4.9% clip year-on-year, versus a 4.6% pace in September, Eurostat said, albeit only due to the rise in energy prices.

Greece's economy meanwhile reportedly picked-up the tempo significantly over the three months to September, ELSTAT reported, with gross domestic product expanding at a 1.0% quarter-on-quarter clip (consensus: 0.4%) and by 2.2% on the year.

In Ireland, the rate of unemployment was reported to have dipped by a tenth of a percentage point in November versus the month before to reach 5.3%.


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