Stocks slide as investors puzzle over trade talks

London, United Kingdom -- Global stock markets mostly fell Monday as traders wondered when and how a US-China trade war will be resolved, prompting mild profit-taking after strong recent gains, dealers said.

London, United Kingdom — Global stock markets mostly fell Monday as traders wondered when and how a US-China trade war will be resolved, prompting mild profit-taking after strong recent gains, dealers said.

Optimism over ongoing trade talks between the US and China had helped push US markets to new records last week, but “a deal has yet to be inked and whether the US will roll back tariffs on China remains a huge point of contention”, said analysts at the Charles Schwab brokerage.

“Stocks are in the red heading into the close after it was reported the mood in Beijing in relation to a deal is ‘pessimistic’,” said David Madden, market analyst at trading firm CMC Markets UK.

“It is believed that China are not happy that President Trump is not interested in rolling back on tariffs,” he added.

“It is likely that this is a ploy by China, but for now dealers are keen to adopt a more risk-off approach,” said Madden.

The major European markets finished lower save for London’s FTSE 100 which squeeked out a gain of less than 0.1 percent.

Meanwhile on Wall Street the main indices were also marginally lower in late morning trading.

Earlier in Asia, Hong Kong stocks rallied after last week’s hefty losses but investors remain on edge over violent protests that have wracked the city. Elsewhere, Asian equities diverged.

Before the weekend, Wall Street’s Dow finished above 28,000 for the first time on Friday after top White House officials played up the progress of negotiations with Beijing.

US President Donald Trump’s economic adviser Larry Kudlow said the first part of a wider pact was on track, while Commerce Secretary Wilbur Ross said that there’ll be a deal “in all likelihood”.

Then on Saturday, China said Vice Premier Liu He had spoken to US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, and had a “constructive discussion on each side’s core concerns regarding the phase-one agreement”.

It added that the two sides will “continue to maintain close communication”.

The comments provided a much-needed fillip after differences over whether, when and by how much to reduce tariffs on each other’s goods spilled out into the open.

Trump this month denied the Chinese commerce ministry’s claim that the two sides had agreed to roll back existing tariffs as part of the deal, details of which have not been released.

In foreign exchange markets, the pound extended gains on opinion polls showing a big lead for the ruling Conservative party ahead of next month’s general election, with traders hoping a clear victory will help Prime Minister Boris Johnson push through his Brexit deal.

Shares in Madrid stock exchange operator BME, meanwhile, rose nearly 38 percent at 35.04 euros, in reaction to a bid by Swiss exchange SIX valuing BME at 34 euros per share.

The premium over the offer price reflected investor sentiment that Euronext, which earlier said it was talking to BME about a takeover, might swoop in with a hostile counter-offer.

London – FTSE 100: UP less than 0.1 percent at 7,307.70 points (close)

Frankfurt – DAX 30: DOWN 0.3 percent at 13,207.01 (close)

Paris – CAC 40: DOWN 0.2 percent at 5,929.79

EURO STOXX 50: DOWN 0.3 percent at 3,699.74

New York – Dow: DOWN less than 0.1 percent at 28,008.82

Tokyo – Nikkei 225: UP 0.5 percent at 23,416.76 (close)

Hong Kong – Hang Seng: UP 1.4 percent at 26,681.09 (close)

Shanghai – Composite: UP 0.6 percent at 2,909.20 (close)

Pound/dollar: UP at $1.2969 from $1.2901 at 2100 GMT

Euro/pound: DOWN at 85.49 pence from 85.67 pence

Dollar/yen: DOWN at 108.59 yen from 108.78 yen

Brent North Sea crude: DOWN 1.8 percent at $62.15 per barrel