Markets

European markets fall but still close out the month over 3% higher

Key Points
  • The pan-European Stoxx 600 provisionally closed down by 1.6%, but the index was still up over 3% since the start of May, on pace to register its second straight positive month following April's more than 6% gain.
  • U.S. President Donald Trump is expected to hold a press conference Friday "on China" and markets are expecting a further souring of relations between the world's foremost economic superpowers.

European markets fell Friday as escalating tensions between the U.S. and China pushed back on the week's positive sentiment amid the reopening of economies across the continent.

The pan-European Stoxx 600 provisionally closed down by 1.6%, but the index was still up over 3% since the start of May, on pace to register its second straight positive month following April's more than 6% gain.

U.S. President Donald Trump is expected to hold a press conference Friday "on China" and markets are expecting a further souring of relations between the world's foremost economic superpowers.

The White House has been ratcheting up pressure on Beijing for weeks over blame for the coronavirus and, more recently, a new security law for Hong Kong that threatens the special administrative region's autonomy, according to Secretary of State Mike Pompeo.

On Wall Street, stocks were mostly lower with all eyes on Trump's update on China.

Back in Europe, France is set to enter the second phase of its coronavirus lockdown easing with restaurants, bars and cafes to reopen from June 2. Meanwhile in the U.K., groups of six people from different households will be allowed to meet in gardens as well as parks from Monday, provided households remain 2 meters apart.

European Union Trade Commissioner Phil Hogan told lawmakers Thursday that the bloc is willing to move forward when Brexit negotiations with the U.K. resume next week, and urged his British counterparts to do the same.

In corporate news, Renault has launched talks with unions over a mass restructure of its French factory operations, which would see manufacturing cease at several plants as the carmaker looks to axe 15,000 jobs worldwide in the hope of surviving a plunge in sales.

On the data front, Sweden's first-quarter GDP (gross domestic product) grew 0.1% quarter-on-quarter, surpassing analyst expectations of a 0.6% contraction. Sweden was one of few countries in Europe to resist lockdown measures at the start of the coronavirus pandemic.

Biggest movers

Tui stock shed more than 14%, retreating from a massive rally earlier in the week. The Anglo-German travel operator announced that it had cancelled all overseas beach holidays from the U.K. until July 1 due to the pandemic.

Rolls-Royce shares continued to tumble on Friday, dropping nearly 14% after S&P downgraded the airplane engine manufacturer's credit rating to "junk."

At the top of the European benchmark, German pharmaceutical equipment provider Sartorius climbed almost 7%.