Friday, September 18, 2020
Home /  Business  /  European stocks plummet on weak eurozone growth

European stocks plummet on weak eurozone growth

Europe’s stock markets mostly dipped Thursday as official data confirmed news of weak eurozone growth.
Economic growth in the eurozone stood at 0.2 percent in the third quarter, unchanged from the previous estimate, according to official Eurostat figures published Thursday.
Growth has now held at an anaemic 0.2 percent for two quarters in a row, underlining the eurozone’s plight amid global uncertainty.
Economic activity was weighed down by Germany, which nevertheless dodged a recession with growth of just 0.1 percent in the same period.
The news helped push Frankfurt and London stock markets into negative territory, while Paris flatlined.
In foreign exchange, the European single currency wavered versus the dollar.
“While the second estimate of Q3 GDP for the eurozone was unchanged, and Germany narrowly avoided a technical recession, we think that the cyclical downturn in the region still has further to run,” warned analyst Andrew Kenningham at research consultancy Capital Economics.
“Our forecast is for GDP in the eurozone to increase by only 0.5 percent next year.”
Asian markets meanwhile fluctuated Thursday following another Wall Street record as Donald Trump hailed progress in US-China trade talks, while eyes were also on Hong Kong as violent protests continued.
Trading floors were edgy, with very few details from Washington and Beijing on negotiations for their mini tariffs agreement.
Trump’s comments on Wednesday that “our trade agreement with China is moving along very rapidly” provided some support, though observers said markets were looking for something more concrete to buy into.
“Let’s not forget that as long ago as June we were told that a US-China trade deal was 90 percent of the way there,” said Michael Hewson, chief market analyst at CMC Markets UK.
“Yet since then we’ve seen new tariffs applied to Chinese goods, albeit with some exemptions, with a new set of tariffs still expected to kick in on December 15.”
Equities have seen healthy rallies in recent weeks on optimism the two sides would soon reach a partial deal as part of a wider agreement to end a long-running trade war that has hit the global economy.
Adding to the unease was a report that China was hesitating over aspects of the deal, which came after Trump dismissed Beijing’s claims last week they had a plan to roll back some tariffs as the talks progressed.