European stocks finished in negative territory Wednesday, with health-care and retail companies weighing. Investors struggled to brush aside fresh trade concerns, which kept the broader market in a downdraft.
What are markets doing?
The pan-European gauge is on pace for a rise of about 0.1% so far this week, with gains since Monday putting the index in positive territory for the year.
Germany’s DAX 30
fell 0.1% at 12,633.54, while France’s CAC 40
ending off 0.4% to 5,501.90. The U.K.’s FTSE 100
however, rose 0.8% at 7,776.65 as the British pound
hit a one-year low against the dollar, falling to $1.2868, compared with $1.2938 late Tuesday, down 0.5%.
edged lower to $1.1583, versus $1.16 late Tuesday in New York.
A weaker currency can help lift sales and revenue for companies doing business outside of Europe.
What is driving the market?
Heavyweight health-care companies and retail companies weighed on stocks. The Stoxx 600’s biggest weighted company, Denmark-based Novo Nordisk AS
beat forecasts with its second-quarter earnings but warned on intensifying competition and price pressures going forward. Shares fell 6%.
Also in that sector, Roche Holdings Ltd.
fell 1.1%. H. Lundbeck AS
was the biggest decliner in Europe as it closed 14.3% lower after the pharmaceutical group’s adjusted profit came in shy of expectations.
Also hampering some gains, trade worries returned to haunt investors after the U.S. said Tuesday that it will impose 25% tariffs on another $16 billion in Chinese goods, with that country expected to respond as it has in the past.
What are strategists saying?
“The earlier round of ‘tit for tat’ tariffs between the US and China on goods has been followed by much more entrenched negotiating positions. Global sentiment surveys have been the first casualty while global trade momentum has stalled—but not necessarily due to the trade dispute,” wrote Sean Darby, chief global equity strategist at Jefferies in a Wednesday note, referring to the tariff spat’s potential to further slowdown economic growth in Beijing and ripple throughout global markets.
“The bottom line is that to date trade tariffs have not noticeably impacted overall growth. However, there are no signs that the US and China are any closer in finding agreement on trade. The likelihood is that the dispute will run beyond the November US midterm elections,” he wrote.
Other stock movers
Shares of Lanxess AG
shot up over 5% after news that the specialty-chemical group will sell its 50% stake in a Arlanxeo synthetic-rubber joint venture to Saudi Arabian Oil Co. for around €1.4 billion euros ($1.62 billion).
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