By Tommy Wilkes
LONDON (Reuters) – European stocks plummeted on Monday as worries over the growing impact of the US crackdown on Chinese Huawei Technologies offset a slightly more positive tone in trade.
Asian equities managed to cancel some of last week's heavy losses on Monday after the US announced plans to lift tariffs in North America, with investors applauding the apparent gains of conservative ruling parties in the United States. Australian and Indian elections.
But the atmosphere has not been reflected in the European markets. The pan-European STOXX 600 Euro lost 0.1%, the German DAX lost 0.17%, while the French CAC 40 lost 0.21%.
The government of US President Donald Trump last week added Huawei to a blacklist of trade, imposing restrictions that will make difficult trade relations with US companies.
The repercussions of this decision became obvious when Google suspended its activities with Huawei.
In Europe, chip makers Infineon Technologies, AMS and STMicroelectronics fell sharply after Nikkei Asian Review announced that German chip maker Infineon had halted deliveries to Huawei. The company has no immediate comment.
"Market volatility continues to result in announcements and interpretations of what is happening in trade disputes between the United States and its trading partners, but mainly China," said Jasper Lawler, head of research at London Capital Group.
"Although the latest headlines on Canada support the sentiment, news that increases risk aversion may be imminent – investors are well aware and are on the alert – it will not change overnight. Google's suspension is unlikely to take Google's suspension from business with Huawei lying down. "
On the positive side, Friday's decision by the United States to remove Canadian steel and aluminum tariffs prompted Canada's foreign affairs minister to promise early ratification of a new North American trade agreement. American.
The MSCI global equity index, which tracks stocks in 47 countries, rose 0.08%. It remains about 3.6% below its highs of 2019, the sudden return of the nervousness of the trade war has reversed the sharp rise in the stock market.
US S & P 500 e-mini futures were up 0.23% following losses on Wall Street on Friday.
Jim Rogers, the prominent investor who co-founded the Quantum Fund with George Soros, told the Reuters Global Markets Forum that he believed Washington and Beijing would soon announce a trade deal, even though the current contract would not not the last time Trump would try to exploit the prospect of a trade war.
"These are bargaining tactics on the part of Mr. Trump at the moment.What will happen is that we will have good news, the market will have a rally.It will probably be the last rally," he said. he declared.
Oil prices jumped after Saudi Energy Minister Khalid al-Falih said there was a consensus among members of the Organization of Petroleum Exporting Countries to maintain oil prices. production cuts in order to reduce "softly" stocks.
Both US crude and Brent crude jumped more than 1.1% on Monday, with West Texas Intermediate trading at $ 63.5 a barrel and Brent crude at $ 73.04 a barrel. [O/R]
The growing tensions in the Middle East, which have supported oil prices, have become even more intense this weekend, when Trump has issued new threats, tweeting that a conflict with Iran would be the "worst case". official end of this country.
In the foreign exchange market, the Australian dollar jumped nearly 1% after the liberal-minded center-right National Coalition won a shock in a federal election, beating the center-left Labor party.
The Indian rupee also rallied after exit polls revealed a majority of supporters of Prime Minister Narendra Modi's Bharatiya Janata party and their allies. The rupee was up 1.1%.
China's offshore yuan rebounded after touching its weakest dollar against the dollar since last November. It traded for the last time up 0.1% to 6.9441 for a dollar.
Sources told Reuters that the Chinese central bank should use currency intervention and monetary policy tools to prevent its weakening to a level close to the $ 7 dollar level in the near term.
The dollar fell slightly against the euro to reach $ 1.111.
The pound sterling has recovered 0.3% to $ 1.2751 after suffering its biggest weekly loss since 2017 after an apparent failure of the Brexit negotiations in London.
The yields of German government bonds have risen slightly. This decline follows a fall to new lows over two and a half years last week, after investors rushed on the safe haven debt.
Austrian yields remained unchanged after a scandal prompted Chancellor Sebastian Kurz to close the coalition with the far right this weekend, thereby increasing the chances of an instant election.
(Additional report by Andrew Galbraith in Shanghai and Divya Chowdhury in Mumbai, edited by Alison Williams)