(Reuters) – European shares pulled back on Friday as investors turned their focus to Washington’s response to the Chinese parliament’s approval of a national security law for Hong Kong, but major indexes were still on course to post monthly gains.
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 26, 2020. REUTERS/Staff
The pan-European STOXX 600 index fell 1.1%, with U.S. President Donald Trump due to announce his response that could escalate tensions between Washington and Beijing.
China on Friday warned of countermeasures, and added that a U.S. bill proposing to sanction Chinese officials over their treatment of the Uighur minority severely interfered in its internal affairs.
“Today’s press conference could well up the ante if President Trump signs off on that bill as well as implement further measures that might hint that the U.S. is keen to send the Chinese a message,” Michael Hewson, chief market analyst at CMC Markets said.
Hewson also noted that week-end and month-end trading was playing a part in Friday’s price action.
The biggest gainers of this week — automakers .SXAP, travel & leisure stocks .SXTP and banks .SX7P — fell between 2% and 3%.
Still, hopes of a global economic recovery as policymakers unleashed stimulus programmes and several countries emerged from lockdowns put the STOXX 600 on course for a monthly gain of more than 3%.
Coffee maker JDE Peet’s BV JDEP.AS, one of the few big companies to go public during the coronavirus crisis, jumped 13.5% in its market debut, valuing it at 15.6 billion euros ($17.3 billion).
AstraZeneca Plc (AZN.L) gained 1.9% as its top-selling drug Tagrisso has been shown to hold back a certain type of lung cancer when diagnosed at an early stage.
Italian football clubs Juventus FC (JUVE.MI), SS Lazio (LAZI.MI) and AS Roma (ASR.MI) rose between 2% and 6% after the Serie A soccer league was given the go ahead to restart on June 20 following stoppage due to the pandemic.
Among decliners, Hugo Boss AG (BOSSn.DE) fell 6.3% after Jefferies downgraded the stock to “hold”, saying its performance improvement will be derailed by two years due to the virus outbreak.
Renault SA (RENA.PA) slid 4.7% on news it was launching talks with unions to restructure several French car plants and confirmed plans to cut around 15,000 jobs worldwide.
Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu and Shounak Dasgupta