European stock markets were steady on Wednesday, as fears of escalating trade war tensions between the world’s two largest economies, the United States and China, eased. Analysts and market participants expect European stock markets to stabilize, especially with the possibility of a meeting between the US and Chinese presidents at the G20 meeting.
Many market participants hope that this meeting between Donald Trump and Chinese president, Xi, is an opportunity to avoid further escalation between the two countries.
The European benchmark STOXX 600 rose by 0.5% and was trading at 357 points at the end of today’s session. Meanwhile, the STOXX 50 index rose 0.1%.
Markets were in doubt, however, with the release of a German news report that claimed new customs duties may be imposed on cars imported from the United States after the G20 meeting in Buenos Aires, Argentina. This led directly to the decline in auto stocks .SXAP, which fell by 0.5%.
Continental, a popular German tire maker, also fell more than 4%, amid “cautious” comments from company officials at a conference today.
Tenaris was the biggest faller on Wednesday, dropping 7.1% after the federal judge issued charges for Chief Executive Officer of Techint, the parent company of Tenaris.
French company Danone also fell 1.5% after the Goldman Sachs group downgraded its rating to “sell”.
Meanwhile, the telecom sector hit its highest level since mid-May, despite expectations of a drop after the European Commission’s unconditional clearance of the purchase of the Dutch Tele2 unit of Deutsche Telekom.
Analysts believe that speculation about the deals could start to gain pace again. However, “unconditional” deals for the UK and Spain are unlikely to materialize because the market unification of both countries faces higher antitrust barriers.