On Thursday, the 21st of May 2020, a slew of European stock exchanges fell across the board, as an escalated Sino-US trade tension seems to have overpowered optimisms linked to an ease of lockdown measures, while investors’ jitters were exacerbated further following release of a downbeat IHS Markit eurozone Composite PMI data, stoking frets of a potential delay in recovery from the pandemic-driven economic downpour.
As a matter of fact, as trade ties between Beijing and Washington had loosened over the recent past following United States’ accusation of China’s alleged mishandling of pandemic data, Sino-US trade tensions were escalated further on Thursday (May 21st) following US President Donald Trump’s remark over China’s planned National Security Law to hunker down Hong Kong’s pro-democracy protest, which in effect had taken a heavy toll on investors’ mind.
On top of that, earlier in the European trading hours, IHS Markit Eurozone composite PMI (Purchasing Managers’ Index) data had added to a shimmering ray of hope for the European investors, as after hitting an all-time low of 13.5 in April, the index had recovered sharply this month to 30.5 followed by an ease of lockdown measures, however, still far behind from the 50.0 level that separates a growth from a contraction.
Eurozone recovery in doubt
Meanwhile, although the US Treasury’s Steven Mnuchin had reaffirmed on Thursday (May 21st) that the “Phase One” Sino-US trade deal had still been in place, referring to a calamitous cloud grooming over the foggiest Sino-US trade frontiers, Cantor Fitzgerald analysts wrote in a client note on Thursday (May 21st), “We believe markets are priced to perfection on the expectation that there is only smooth sailing.
Should (COVID-19) cases remerge, it will remind investors that the path back to growth will be slow and bumpy. Add to that the National Congress meeting in China amid boiling U.S.-China tensions. ” Quoting statistics, on Thursday’s (May 21st) European market closure, Frankfurt’s DAX had dwindled 1.41 per cent to 11,065.93, leading the downfall in the bloc, while French CAC 40 curbed out 1.15 per cent to 4,445.45 and London’s FTSE 100 faltered 0.86 per cent to 6,015.25.
Elsewhere in the Europe, Madrid’s benchmark IBEX 35 had wrapped up the day almost flatlined to 6,686.10 after hitting a session high of 2 per cent to 6,773.10 in the late-afternoon trading hours, while Italy’s FTSE MIB vamoosed 0.73 per cent to round off the day at 17,087.06.