On Wednesday, the 29th of May 2019, a basket of European shares ended their short-lived winning streak over EU-election relief and delayed US auto tariffs, after Chinese Newspapers had reported that China would likely to telescope rare earth element supply to hit United States, festering investors’ optimism and prompting them to seek for safe-haven assets.
Over Wednesday’s (May 29th) market, it had been a flight-to-safety throughout the day following Chinese media’s strong implication that Beijing would sharply curb its rare-earth-element export. In effect, wide-ranging electronics, computer chips and autos would suffer terrible impacts, as rare earth elements, a set of 25 materials found exclusively in China alongside Northern part of Mongolia, were being used in rechargeable batteries for hybrid and electric cars, computer chips, lighting and wind turbines.
Followed by the reveal of latest trade-spat headlines, in alignment with Wall St., the regional Pan-European STOXX 600 had shed more than 1.4 percent to a three-month closing low. Referring to a rising geo-political tension which had been keeping the investors on their heels, a market analyst at CMC Markets UK, David Madden wrote in a client note, “Trade tensions have certainty gone up a notch, and investors are running for the hills.
European markets have also to contend with the rising political tensions between Italy the EU ... investors fear the political fight could trigger a debt and banking crisis in Italy”. On Wednesday’s (May 29th) market wind-down, there had been a bloodbath over a majority of European stock exchanges, while London’s FTSE 100 lost 1.15 percent to 7,185.30, trade-sensitive Frankfurt’s DAX tumbled 1.57 percent to 11,837.81, while Paris’s CAC 40 had shrugged off 1.70 percent to 5,222.12.