Stocks mixed as investors await US-China trade deal
European stocks reversed early gains while the pound slipped on slowing UK economy and rate cut concerns.
Stock markets were mixed ahead of the expected signing of a partial trade deal between China and the US, as well as the easing of tensions in the Middle East.
The pan-European Stoxx Europe 600 reversed a modest gain trading 0.18 per cent lower as car makers dropped following reports that Japan’s Nissan is considering a split from French partner Renault.
Germany’s DAX closed 0.24 per cent lower at 13,451.59, France’s CAC 40 down 0.02 per cent at 6036.14 and the UK’s FTSE 100 0.39 per cent higher at 7617.60.
US benchmarks opened higher, resuming the previous week’s rally ahead of the trade deal and the start of the fourth-quarter earnings season.
The Dow Jones Industrial Average rose 54 points, or 0.2 per cent, at the open in New York. The S&P 500 advanced 0.2 per cent while the Nasdaq Composite gained 0.4 per cent.
The pound slid against the dollar and the euro after another Bank of England official pointed to a potential vote for an interest-rate cut this month.
The release of data showing UK’s economy grew at its weakest annual pace in over seven years in November also weighed on the British currency.
It was trading below the $1.30 level against the dollar at $1.2992 in mid-afternoon trade, a drop of 0.5 per cent on the day. The euro also advanced against the pound, up 0.5 per cent at £0.8558.
Berenberg analysts wrote in a note that while sterling remains weak relative to fundamentals and underlying domestic confidence, the ongoing Brexit uncertainty during the trade talks between the UK and the European Union may still weigh on the currency.
Oil prices retreated as investors shifted their focus away from easing Middle-East tensions. Global benchmark Brent crude slipped 7 cents to $64.91 per barrel, while West Texas Intermediate crude slid 0.3 per cent to $58.83 per barrel.
Gold weakened 0.5 per cent to $1,554.52 an ounce.
FURTHER READING: Interest rate cut on the cards as UK economic growth slows
FURTHER READING: China's vice premier to sign trade deal in Washington
