Fundamental Comment

European stocks fall amid rising rift between US and China

European stocks fall amid rising rift between US and China

European stock indexes fell during Friday’s trading, as tensions between the world's two largest economies escalated and after the release of downbeat economic data were announced.

As of 09:23 GMT, the Euro Stoxx 50 index slump 1.25 percent to trade near 3,054.38 points.

German DAX 30 index descended 1.61 percent and now settles near 11,591.78 points, while French CAC 40 reached 4,707.49 points, down 1.34 percent.

Britain’s FTSE 100 Index descended to 6,156.47 points, bringing its slump today to about 1.02 percent.

European stock markets were negatively affected by the growing tensions between the United States and China. This is evident in the appetite for risk among investors despite the approaching opening of economies across the continent again.

US President Donald Trump is expected to hold a press conference today on China, where the White House has been putting pressure on Beijing for weeks over the Covid-19 virus, most recently because of China's new security legislation on Hong Kong.

The Chinese parliament yesterday passed Hong Kong's national security legislation, a move western powers fear could erode the city's freedom.

The danger is that Hong Kong may lose some of its own privileges under US law, which could threaten its position as a global financial center.

US Central Bank President Jerome Powell is also scheduled to participate in an online panel discussion in New Jersey later in the day.

The automotive sector fell by about 2.7 percent at the beginning of the session, driving losses in all other sectors.

On the economic front, France recorded an economic contraction during the first quarter of this year, while Sweden's economy grew surprisingly in the same period.

US economic data, including US spending, income, personal savings, consumer confidence and commodity trade balance, are going to be released later today.

At press time, the EUR/USD pair rose today, reaching 1.1130 levels, while the pair opened today’s session at 1.1079. Moreover, the single currency is on track for a second straight weekly gain.

Share Article