EU Stocks Uncertainty Persist as US Tariff Plans on China Loom

News Desk

London: European equities hesitated on Monday as investors paused ahead of key US inflation data, following last week’s record-breaking highs driven by hopes of interest rate cuts and Britain’s emergence from recession.

London remained steady around midday while Frankfurt and Paris dipped slightly in early afternoon trading. All three had closed at record levels on Friday.

“European markets are in a holding pattern as we cautiously approach a new week, likely to be shaped by Wednesday’s US inflation data,” noted Scope Markets analyst Joshua Mahony.

“Investors are turning their attention back to economic indicators, with over 90 percent of S&P 500 companies having already reported their first-quarter earnings.”

Sentiment was tempered by reports of the White House planning to increase tariffs on clean energy products from China, alongside a drop in US consumer confidence and rising inflation expectations.

These developments contrasted with the recent market rally driven by optimism about potential rate cuts by the US Federal Reserve, the European Central Bank, and the Bank of England.

Asian markets also saw fluctuations as traders digested weak Chinese data and news of Beijing’s plan to issue nearly $140 billion in bonds to stimulate the economy.

Concerns were fueled by reports of a decline in a broad measure of credit in China, coupled with the prospect of increased tariffs on Chinese electric vehicles by the US.

Amidst this uncertainty, investors found some relief in Chinese authorities’ announcement of plans to sell sovereign bonds to raise funds for economic stimulus.

The sale, scheduled to begin this week, follows earlier announcements of significant spending initiatives aimed at revitalizing growth. The central government will issue 30-year bonds starting Friday, with additional bonds of 20-year and 50-year tenors set for sale later in May and June, respectively. Additional input from AFP & APP.