European Stocks on Trade War Worries

The main European stock indices were all trading in the red by Wednesday afternoon. European traders are worried about the ongoing trade war between the United States and China. There is also regional political turmoil between the European Union and Italy over the Italian budget.

The benchmark London exchange, the FTSE 100, was down over 1.3 percent. The European benchmark, the STOXX 600 is down 1.2 percent. This index is now at its lowest price point since March 11.

The basic resources sector, on the STOXX 600, is down two percent as all the other sectors are deeply in the red this afternoon. The technology, construction and material sectors are all down over one and a half percent.

Traders are being cautious with at risk asset classes today as the trade battle between the two largest economic powerhouses are roiling the markets.

European Traders Digest Trade Remarks from President Donald Trump

President Donald Trump said, earlier in the week, that his administration is “not ready” to make any trade deal with China. He also said that tariffs on Chinese imports could increase “substantially.” The trade war seems not to have an end in sight and this is worrying the global markets.

A Chinese official said, on Tuesday, that his country could use its strength with rare earth minerals. This would be their leverage against further tariffs by the United States.

In Europe, there is increasing regional political turmoil between the European Union and Italy. The EU is now thinking about disciplinary action over the Italian government’s failure to get control of its national debt.