Europe Markets

European stocks close lower ahead of much-anticipated G-20 summit

Key Points
  • Treasury Secretary Steven Mnuchin tells CNBC that the U.S. and China were almost there on a trade deal.
  • Fed Chair Jerome Powell reiterates the central bank's "independence" amid pressure from President Donald Trump.
  • Investors worldwide await a meeting between Trump and Chinese President Xi Jinping at the G-20 summit.

European stocks closed lower Wednesday as traders looked for signs of what to expect from talks between the U.S. and China at the upcoming G-20 summit.

The pan-European Stoxx 600 closed provisionally 0.3% lower, with auto stocks gaining 0.9% while the healthcare sector led losses with a 1.2% fall.

Markets began the day in the red after Federal Reserve chairman Jerome Powell tempered expectations of an imminent cut to interest rates.

They erased losses by mid-morning after Treasury Secretary Steven Mnuchin told CNBC's Hadley Gamble Washington and Beijing "were about 90% of the way there" on finding a trade deal before negotiations stalled. Equities in Europe dipped back into negative territory shortly after.

Mnuchin expressed confidence that President Donald Trump and Chinese President Xi Jinping can make progress in talks at the forthcoming G-20 meeting in Osaka this weekend.

U.S markets got a boost from the news, with the Dow Jones Industrial Average climbing over 70 points, while the S&P 500 and Nasdaq indexes were also in positive territory.

Back in Europe, stock exchange venues are preparing to delist over 250 Swiss companies, including blue chips like Nestle and UBS, on Monday July 1 if no resolution is reached in a political row over Switzerland's bilateral agreements with the European Union.

In corporate news, Reuters reported Tuesday that rural U.S. telecom carriers dependent on Chinese giant Huawei for network gear are in discussions with European rivals Ericsson and Nokia as possible replacements. Ericsson stock was down over 1%, while Nokia rose nearly 0.6%.

Meanwhile, German electric utility group E.ON has offered to sell assets in Hungary, Germany and the Czech Republic to address antitrust concerns from the European Union surrounding the company's bid for rival Innogy's network and retail assets. E.ON shares were down almost 0.9%.

In terms of individual stocks, British energy company John Wood Group climbed around 6.6% after keeping its full year outlook unchanged while announcing improved first half performance. German steelmaker Thyssenkrupp, meanwhile, jumped nearly 6.9% after reports of a possible offer from Finnish engineering company Kone.

At the other end of the Stoxx 600, German chemical distributor Brenntag fell 3.6% after German media reported that it had sent weapons-grade chemicals to Syria in 2014 despite sanctions, by using a Swiss subsidiary.