Investors are becoming wary of European stocks which are “struggling for direction”, reports CNBC. Italy has been labelled as the only region in “positive territory”, with its FTSE MIB up by 0.2 percent. CNBC’s Julianna Tatelbaum explained: “Europe stocks are struggling for direction. So that uplift that we saw in the Asia session is only filtering through to a degree here in Europe.
“The only region in positive territory here this morning is Italy, the FTSE MIB is up 0.2%, but other than that we are seeing some caution from investors.
“Early on the European Stoxx 600 did rally on the back of that strong hand over from Asia, but since the stocks have pared back gains.
“Now the best performing actor of the bunch is basic resources, which demonstrates how closely European investors are watching what goes on between Washington and Beijing with those trade talks.
“But the sense from Europe this morning is very much one where investors are in a wait and see mode.”
European stocks were in the red last week with factory activity weakening across much of the continent as trade war anxieties and fears of an economic slowdown hit global markets.
Eurozone manufacturing activity was revealed to have barely expanded at the end of 2018, providing disappointing reading for European Central Bank policymakers.
Manufacturing PMI fell from 51.8 to 51.4 in November, in line with the flash estimate.
Earlier PMI surveys showed Italy remained in contraction territory and was joined by France, where data showed a first deterioration in operating conditions for 27 months.
Irene Cheung, Asia strategist at ANZ, said: “We are really seeing a global slowdown into this year, and in Asia, particularly, export-oriented countries are hurting.
“Our expectation for central banks is that most of them won’t change policy in 2019 and these numbers coming out on the weak side won’t change that outlook.”
US President Donald Trump said on Sunday that trade talks with China were going very well and that weakness in the Chinese economy gave Beijing a reason to work toward a deal.
The two sides agreed to hold “positive and constructive” dialogue to resolve economic and trade disputes in accordance with the consensus reached by the countries’ leaders, Foreign Ministry spokesman Lu Kang told reporters at a regular news briefing.
He said: “From the beginning we have believed that China-US trade friction is not a positive situation for either country or the world economy. China has the good faith, on the basis of mutual respect and equality, to resolve the bilateral trade frictions.”
Daily Express :: City and Business Feed