European Stocks End Strong First Half With Eyes on Trade Outlook
European stocks dropped on Monday, although they still wrapped up the first half of the year with solid gains as investors watched for progress on trade talks.
The Stoxx Europe 600 Index fell 0.4% by the close, with auto and chemical stocks among the biggest laggards. The benchmark has gained 6.6% this year, narrowly missing out on its best six-month performance in two years.
Renewable stocks including EDP Renovaveis SA and Vestas Wind Systems A/S dropped after the latest version of US President Donald Trump’s spending package sought to more aggressively phase out key tax incentives for wind and solar projects.
European Central Bank Vice President Luis De Guindos said the world is facing “brutal uncertainty” and that market valuations are very high at the moment.
The European benchmark has outperformed the S&P 500 by the most since 2006 in dollar terms so far this year, the most dramatic sign of how the region’s markets are staging a comeback after more than a decade in the doldrums.
Trade talks between the Trump administration and key partners continued apace, with Japan’s top negotiator extending his stay in the US and Canada withdrawing its digital services tax on technology companies to restart negotiations.
Meanwhile, data showed German inflation unexpectedly eased this month, matching the ECB’s goal for the first time in almost a year. The DAX Index fell 0.5%. The gauge is among the best-performing indexes in Europe this year on optimism around fiscal stimulus.
Source : Bloomberg
