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Europe close: Weak Chinese trade data drags shares lower

By Alexander Bueso

Date: Monday 09 Dec 2019

Europe close: Weak Chinese trade data drags shares lower

(Sharecast News) - European stocks were lower on Monday after the release of weak Chinese trade data, although another report revealed stronger-than-expected German exports.

By the end of trading, the Stoxx 600 was 0.24% lower at 406.39, as Germany's Dax fell by 0.46% to 13,105.61 and the French CAC 40 gave back 0.59% to 5,837.25. Meanwhile, London's FTSE 100 was 0.1% lower at 7,233.90.

Though Chinese imports showed a slight improvement, data released by Beijing this weekend showed that exports fell by 1.1% in November as the amount of goods sent to the US declined by 23% amid the ongoing trade conflict.

The two superpowers are in the midst of negotiations for a phase one trade deal as Beijing seeks to avoid being subject to new batch of US tariffs that are due to kick in on Sunday.

Oanda analyst Craig Erlam said: "It doesn't take a genius to see that the trade war has severely taken its toll on Chinese trade. Unfortunately, as we've seen for months now, both sides have pretty high pain thresholds, which makes a deal far from certain.

"In fact, I wouldn't be surprised if tariffs kick in and talks collapse completely. That would certainly make a Santa rally this year unlikely."

Meanwhile, Chinese state media reported that President Xi Jinping told new European Council President Charles Michel that he hoped China and the European Union could put together a new investment agreement as soon as possible.

Data from Destatis showed that German exports beat expectations, posting a 1.2% month-on-month rise in October, compared with 1.5% growth in September, while imports remained flat.

Pantheon Macroeconomics analyst Claus Vistesen said fourth quarter exports had made a "strong start" and said the figures pointed to resiliency, though he warned that he remained less certain than usual about the underlying trends.

Among individual stocks, London-listed Tullow Oil crashed after cutting production, suspending its dividend and announcing the immediate resignation of its chief executive Paul McDade.

German lighting business Osram Licht gained ground after its shareholders accepted a $4.4bn takeover bid from Austrian chipmaker AMS, which found itself in the red.

French pharmaceutical outfit Ipsen continued to fall after the US food and drug administration on Friday halted clinical studies into the effects of its Palovarotene fibrodysplasia drug treatment, citing safety concerns.

Fellow Paris-listed pharmaceutical outfit Sanofi was also lower after it announced a $2.5bn deal for Californian biotech company Synthorx.


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