Europe: Stocks rebound at open from sharp losses

[LONDON] Europe's major stock markets rebounded at the open on Friday, after a sharp-selloff that was sparked by the China-US trade war and global economic worries.

Sentiment brightened somewhat after US President Donald Trump declared that there is a "good possibility" Washington will reach an agreement with Beijing to end their trade conflict, adding that "it's possible that Huawei would be included in a trade deal."

However, investors remain anxious over European Parliament elections that could see big gains for populist forces, while speculation is building that British Prime Minister Theresa May is set to resign.

In opening deals, London's benchmark FTSE 100 index of leading blue-chip companies rose 0.4 per cent to 7,259.59 points.

In the eurozone, Frankfurt's DAX 30 jumped 0.6 per cent to 12,027.31 points, while the Paris CAC 40 gained 0.5 per cent to 5,307.80 compared with closing levels on Thursday.

"If the morning's gains are predicated on anything beyond a post-plunge rebound, it is likely Donald Trump's latest comments," said Spreadex analyst Connor Campbell.

Global equities had slumped Thursday in what one analyst called a "perfect storm" of Europe elections, fresh economic gloom, Mrs May's decision to delay a key Brexit vote and the raging China-US trade war.

Mr Trump's remarks have meanwhile sparked hope of a breakthrough at the next G20 gathering in Japan next month.

"President Trump's latest comments, after slumping markets, offered hope for some potential progress at the June G20 meeting," Barclays analysts said in a research note.

But they also added: "The most recent escalation suggests a partial decoupling of the two countries, in our view, at least in the tech and national security-related space."

Tensions between China and the US have ramped up ever since Mr Trump banned Chinese telecoms giant Huawei from the US market and prevented American firms from selling to it.

Meanwhile on Friday, sterling wallowed close to four-month lows against the dollar, with Mrs May's prime ministership on the precipice after her revised Brexit deal was widely criticised and much of her party calling for her to step down.

"Volatility in the pound could spike again as Theresa May is set to announce her timetable for her resignation as Prime Minister and leader of the Conservatives," said London Capital Group analyst Jasper Lawler.

"With Boris Johnson - who favours a quick, sharp Brexit - favourite to win, traders are struggling to find reasons to buy into the pound in any meaningful way right now," he added.

"The overall negative trend for sterling is expected to remain for some time yet."

AFP