Wednesday night’s Dow decline, and the subsequent losses in the Asian session, led to a duff start from the European indices.
The catalyst for all this was a report from the Wall Street Journal claiming that the US-China trade talks had stalled due to the tech-elephant in the room: Huawei. The White House are trying to figure out how to handle Beijing’s demands regarding de-black listing the smartphone maker, apparently the key reason why there has been so little movement since the latest truce was announced in Osaka. This WSJ update comes not long after Donald Trump claimed there was ‘a long way to go as far as tariffs’, highlighting the $325 billion in Chinese goods yet to be effected.
In response the Dow Jones lost half a percent on Wednesday, and is expected to shed another 80 points later this afternoon. Taking that as their cue, the FTSE gave up 35 points to sink back under 7500; the CAC fell below 5540 following a 0.5% decline; and the DAX dove 120 points to strike its worst price in just over 3 weeks.
Despite the OBR warning that a no-deal Brexit would likely result in a recession – a loudly-beaten drum at this point – the pound continued the most lifeless of comebacks on Thursday. A 0.2% rise against the dollar lifted cable towards $1.246 – it struck lows of $1.238 yesterday – while against the euro a 0.1% increase kept it away from Wednesday’s near 8-month nadir.
ASOS (LON:ASOS) fell even further out of fashion on Thursday, rapidly undoing the meagre rebound managed in the last week as it plunged 13%. This as the online retailer warned pre-tax profit would be between £30 million and £35 million against the £102 posted the previous year, as it felt the impact of an extended infrastructure overhaul at its US and European warehouses.
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