EUROPE MARKETS: Trade Tensions Weigh On Europe With Tech, Apparel Makers Down
May 20 2019 - 9:22AM
Dow Jones News
By Dave Morris
Ryanair shares drop after profit warning
European stocks stumbled Monday as trade tensions kicked off the
week, dragging global markets lower, with technology and apparel
makers under pressure on the continent.
How did markets perform?
The Stoxx 600 was down 1.3% to 376.59, after falling 0.4%
Friday.
Italy's FTSE MIB plunged 2.8% amid increased political tensions,
after Deputy Prime Minister Matteo Salvini led a rally Saturday
ahead of European elections, vowing to take on the region's
mainstream leaders.
The U.K.'s FTSE 100 fell 0.9% to 7,282.65. On Friday it had
edged down 0.1%.
The pound reversed course and gained 0.2% to $1.2743 after
falling 0.4% Friday.
In Germany, the DAX (DAX) declined 1.8% to 12,013.75, adding to
its woes Friday when it swooned 0.6%.
France's CAC 40 fell 1.8% to 5,340.72. On Friday it moved down
0.2%.
What's moving the markets?
(http://www.marketwatch.com/story/oil-prices-rise-on-signs-opec-may-extend-output-cuts-2019-05-20)Shares
of chip makers were under pressure as U.S. technology companies
have begun to comply with the White House's ban
(http://www.marketwatch.com/story/google-xilinx-begin-to-comply-with-trump-ban-on-huawei-2019-05-20)
on China's Huawei Technologies Inc. Shares of Infineon Technologies
Inc. (IFX.XE) slid nearly 5% after the German chip group said it
was also cooperating. The company said "the great majority" of
products Infineon delivers to Huawei are "not subject to U.S.
export control law restrictions, therefore those shipments will
continue."
Market Snapshot:Stocks poised to start the week lower as trade
tensions persist
(http://www.marketwatch.com/story/stocks-poised-to-start-the-week-lower-as-trade-tensions-persist-2019-05-20)
(http://www.marketwatch.com/story/stocks-poised-to-start-the-week-lower-as-trade-tensions-persist-2019-05-20)U.S.
President Donald Trump said concessions in negotiations could not
be "50-50" because trade practices by China had historically
damaged the U.S. There is currently no timeline for the two sides
to resume talks. The U.S. appears to have shifted focus to other
areas such as trade with Canada and Mexico, agreeing Friday to
exempt the two countries from steel and aluminum tariffs.
(http://www.marketwatch.com/story/oil-prices-rise-on-signs-opec-may-extend-output-cuts-2019-05-20)Sunday's
meeting of the Organization of the Petroleum Exporting Countries
(OPEC) sent oil prices higher
(http://www.marketwatch.com/story/oil-prices-rise-on-signs-opec-may-extend-output-cuts-2019-05-20)
after Saudi Energy Minister Khalid al-Falih said efforts to shrink
crude inventories could continue into the second half of 2019. But
prices came off earlier highs on concerns there wasn't full
consensus on that.
Brent crude oil was up 0.4% to $72.54 a barrel, while West Texas
Intermediate (WTI) rose 0.3% to $62.92 a barrel.
Writing in the Sunday Times, U.K. Prime Minister Theresa May
said she hoped to get a Brexit deal through Parliament on her
fourth attempt by making what she called a "new and improved"
offer. The move eliminates the prospect of indicative votes, but
critics warned that the gambit would fail unless there were
significant changes, none of which May mentioned in her
article.
Which stocks are active?
Ryanair Group Holdings PLC (RYAAY) dropped 3% after warning that
the grounding
(http://www.marketwatch.com/story/ryanair-warns-of-profit-hit-over-737-max-grounding-2019-05-20)
of Boeing's 737 MAX jets would have a negative impact on the coming
year's results. The company reported full year earnings to March 31
showing pretax profits fell 30% year over year. It cited fuel and
staff costs as factors in the decline.
Russ Mould, investment director at AJ Bell, said: "The silver
lining to this thick cloud is that its peer group are facing
exactly the same pressures and many operators have far less secure
balance sheets than Ryanair."
Deutsche Bank AG (DBK.XE) was down 3% after UBS analysts
downgraded the shares from neutral to sell. They cited factors such
as heavy competition in its home market of Germany and limited
strategic options, given the collapse of merger talks with
Commerzbank AG and a lack of compelling alternatives.
Other European chipmakers also came under pressure, with ams AG
(AMS.EB) dropping 11%, STMicroelectronics NV (STM.FR) (STM.FR) down
8% and ASML Holding NV.
Luxury-goods makers, many of whom count China as a key market,
were also down, with LVMH Moet Hennessey (LVMUY) dropping nearly
3%.
(END) Dow Jones Newswires
May 20, 2019 09:07 ET (13:07 GMT)
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