Europe close: Caution sets in after Friday surge
European stocks were lower at lunchtime on Monday as investors grew sceptical about the progress made in Sino-US trade relations, while weak Chinese data highlighted the impact of tariffs.
By the end of trading, the Stoxx 600 was down 0.52% at 389.58, the German Dax fell 0.20% to 12,486.56 and France's CAC 40 was 0.40% lower at 5,643.08. London's FTSE 100 was 0.46% lower at 7,213.45.
On the trade front, US President Donald Trump said on Friday that the initial phase of a trade deal will be completed within three to five weeks and would result in $40bn-$50bn of Chinese purchases of American agricultural products, alongside measures to protect intellectual property and as relates to financial services.
But on Monday, Bloomberg cited a source familiar with the matter as saying that China will seek further talks before committing to the "phase one" trade deal.
Washington delayed an increase in tariffs on $250m-worth of Chinese goods which had been scheduled to come into force on Tuesday, though planned tariff hikes scheduled for December remained in place - at least unless a deal had previously been agreed.
Neil Wilson, chief market analyst at Markets.com, said: "It wasn’t even much of a deal in the first place - the fact that China is not yet even on board with it suggests very little progress has been made, and the possibility of further gains are limited.
"I’d be worried that the White House, worried about losing face, now throws the baby out with the bath water and abandons whatever goodwill there was. Steve Mnuchin on tap shortly may clarify the situation."
Nevertheless, at least two closely-followed Chinese media outlets - the Global Times and Taoran Notes - agreed that a breakthrough had in fact been achieved.
Meanwhile, data out of China showed a 3.2% drop in September exports compared to the year before, while imports fell by 8.5% during the same period.
Economists polled by Reuters had expected a 3% decline in exports, while imports had been forecast to decrease by 5.2%.
CMC Markets analyst David Madden said: "The figures underline the economic slowdown in China. The trade tensions are clearly impacting domestic demand, as well as international demand for Chinese goods."
Elsewhere, figures from Eurostat earlier showed that Eurozone industrial production rose more than expected in August, with output increasing 0.4% on the month and beating expectations for a 0.3% jump.
Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "These are decent data, but the relatively solid performance in August almost surely isn’t enough to salvage the Q3 headline as a whole, at least not if the main surveys are anything to go by."
Among individual stocks, shares in Aker BP dropped after the Norwegian oiler said third-quarter oil and gas production had fallen short of targets of 158,700 barrels of oil equivalent per day, as the company blamed new wells for its output of 146,100 boepd.
Finnish oil refiner Neste Oyj was lower after saying it is experiencing the failure of multiple IT systems, either through a cyber attack or a malfunction.
Roche Holding and Novartis were also both in the red following reports that the United States is considering tariffs on Swiss pharmaceutical products, although by the end of the session they had largely recovered from early selling .