By Geoffrey Smith
Investing.com -- Europe’s stock markets were mixed on Monday under the impact of another dramatic escalation of the U.S.-China trade war over the weekend.
Markets appeared deeply unsettled by comments by President Donald Trump over the weekend suggesting that he would invoke emergency powers to impose an effective boycott on China, and losses would have been steeper had it not been for yet more comments by Trump on Monday morning.
Trump claimed at a press conference on the sidelines of the G7 summit in Biarritz, France, that he had received two calls from China over the weekend, asking to resume trade talks. A Chinese foreign ministry spokesman was reported as saying that he wasn’t aware of any such request, but Trump’s comments came only hours after China’s top trade official, Liu He, was quoted in a speech as calling for “calm” in resolving the trade dispute.
Markets had ended last week on a negative note after Federal Reserve Chairman Jerome Powell had indicated central banks would struggle to offset the negative impacts of disruptive trade policies.
By 5 AM ET (0900 GMT), the benchmark Euro Stoxx 600 was down less than 0.1% at 371.20, having recovered from a two-week low of 369.08 at the opening.
Germany’s DAX was up 0.2% despite signs of a further deterioration in business confidence in August. The Ifo business climate index fell to a new seven-year low, with businesses becoming gloomier both about current conditions and the outlook.
“Major concern next to industrial crisis mood a la 2009, is the marked deterioration in the service sector,” Katharina Utermoehl, a senior economist with Allianz (DE:ALVG), said via Twitter.
The figures came a day after German central bank president Jens Weidmann said he didn’t think the time was ripe for a large-scale fiscal stimulus package.
Elsewhere, the Italian FTSE MIB was the standout performer, up 0.6%, on reports that the center-left Democratic Party is edging towards an agreement on forming a new coalition with the 5 Stars Movement, having allegedly dropped its opposition to Giuseppe Conte remaining Prime Minister.
Trading was thinner than usual due to the closure of the U.K. market for a holiday.