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Europe: Autos, miners keep shares in the red as trade jitters resurface

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European shares fell on Thursday, hurt by losses for miners and automakers as doubts grew over the prospect of a trade deal between the United States and China, with weak earnings from oil major Royal Dutch Shell adding to the gloom.

[BENGALURU] European shares fell on Thursday, hurt by losses for miners and automakers as doubts grew over the prospect of a trade deal between the United States and China, with weak earnings from oil major Royal Dutch Shell adding to the gloom.

A Bloomberg report said that China is doubtful of a long-term trade deal with US President Donald Trump, raising fresh uncertainty about progress between the two countries after an interim trade deal was almost finalised.

The report dashed optimism earlier in the session sparked by the US Federal Reserve lowering borrowing costs for the third time this year on Wednesday.

The pan-European Stoxx 600 index ended 0.5 per cent lower but logged its second straight monthly gain after an October packed with corporate earnings reports along with some Brexit and trade twists.

"The pain inflicted by the trade war on the US economy may eventually make it more willing to compromise but the question is how much pain is needed for a full deal to be signed," said Timme Spakman, economist, international trade analysis at ING.

Tariff-exposed miners were down 1.4 per cent, while automakers lost 1.3 per cent.

However, the biggest decliners were oil and gas producers, which fell 1.7 per cent after heavyweight Royal Dutch Shell slid 4 per cent.

Shell warned uncertain economic conditions could slow its US$25 billion share buyback plan. That followed warnings from BP and France's Total earlier this week about lower oil and gas prices hitting margins.

Airlines also posted some disappointing numbers.

Air France-KLM fell 1 per cent after it said slowing travel demand was likely to hurt ticket sales in the remainder of the year, while British Airways owner IAG said industrial action by pilots at the airline had knocked third-quarter profits.

In the auto sector, a deal between Fiat Chrysler and Peugeot owner PSA to create the world's fourth-largest automaker lifted the shares of Fiat Chrysler 8.2 per cent.

However, PSA fell about 13 per cent, after having risen nearly 5 per cent in the last three sessions in the run-up to the deal.

Spanish utility Enagas jumped 5.5 per cent after a media report said a Spanish regulator was considering softening proposed cuts to gas grid returns.

REUTERS

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