Europe midday: Markets regain ground after Trump comments on China trade

(Sharecast News) - European stocks partially recovered on Monday after Donald Trump attempted to ease rising trade tensions between the US and China which had sparked a dramatic sell-off the previous session.

"Stock markets, cryptocurrencies and the oil price are all regaining some ground after Friday's rout, but gold and silver continue to power higher, even as President Trump offers soothing words about the hoped-for summit between China and the USA, to suggest that someone, somewhere is still feeling nervous," says AJ Bell investment director Russ Mould.

By 1258 CEST, the Stoxx 600 was up 0.4% at 566.39, following a 1.3% plunge on Friday, after president Donald Trump said he would hike tariffs and impose export restrictions on China, calling off a scheduled meeting with counterpart Xi Jinping following China's newly announced export controls on rare-earth materials.

However, sentiment was recovering on Monday after Trump attempted to ease concerns at the weekend. "Don't worry about China, it will all be fine!", the president said in a social media post, adding: "[Xi] doesn't want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!"

Even US stock futures were recovering slightly after the S&P 500's worst daily loss (-2.7%) in six months, with pre-market trading showing a 1.2% gain on the benchmark index.

"The President's propensity to shoot from the hip unsettles the investment environment, even though some are already speculating that the TACO trade is alive and well," said Richard Hunter, head of markets at Interactive Investor. "His subsequent comments on social media over the weekend were decidedly more conciliatory, and at this very early stage, Dow futures are pointing to a brisk recovery which would lessen the blow of Friday's bruising session."

On this side of the Pond, the euro neared a two-month low against the US dollar as political uncertainty in France continued to hit the single currency. Prime minister Sebastien Lecornu, who was reappointed on Friday after having quit just days before, is expected to present a draft budget bill to cabinet and parliament on Monday.

No major economic data was scheduled for release across Europe, though Chinese trade figures were in focus after September's annual growth in both exports (+8.3%) and imports (+7.4%) comfortably topped analysts' expectations.

Market movers

Big Yellow Group surged 18% in London as it confirmed that private equity firm Blackstone is considering a possible offer for the self-storage company. "Blackstone Funds' evaluation of Big Yellow is at a preliminary stage and Blackstone is considering, amongst other factors, the macro-economic environment including the potential impact of the upcoming UK budget as it relates to the self-storage sector," it said.

French cable and optical fibre company Nexans dropped 9% after an abrupt change of leadership, replacing its CEO without giving a specific reason. The firm said it made the move to "create a new momentum to further optimise performance".

Lloyds was higher despite the news it is putting aside a further �800m to cover compensation costs related to the motor finance mis-selling scandal. "A rising share price represents two things: one, some clarity on Lloyds' potential exposure; and two, hope that Lloyds might successfully get the regulator to tweak its proposal in its favour," said Mould from AJ Bell.

Precious metal miners Fresnillo and Endeavour Mining were making solid gains as gold and silver prices rose, while tech stocks ASML and BE Semiconductor Industries were rebounding after Friday's sell-off.