European stocks were lower Tuesday morning, amid rising doubts over whether the world’s two largest economies will be able to resolve their trade differences.
The pan-European Stoxx 600 was down around 0.4 percent during mid-morning deals, with most sectors and major bourses in negative territory.
Europe’s autos sector, which has been the most sensitive to trade war fears in recent months, led the losses, down almost 2 percent Tuesday morning. France’s Faurecia was the worst sectoral performer, with shares down over 4 percent after Jefferies cut its target price for the stock.
The technology sector was also a big loser, falling almost 1 percent. Chip-makers are also heavily exposed to China, with AMS and Siltronic both dipping over 3 percent Tuesday morning.
Looking at individual stocks, Germany’s Carl Zeiss Meditec surged towards the top of the European benchmark during mid-morning deals. It comes after HSBC upgraded its stock recommendation to “buy” from “hold.” Shares of the company jumped nearly 9 percent on the news.
Market focus is largely attuned to global trade developments, after news of a temporary trade truce between the U.S. and China had sparked a global rally in equity markets in the previous session.
The political deal, agreed over a working dinner between President Donald Trump and President Xi Jinping on Saturday evening, should see both sides hold off on imposing additional charges against each other’s goods in the short term.
However, confusion over the exact timing of the tariffs cease-fire soured investor sentiment overnight. One White House official said a 90-day period to resolve lingering Sino-U.S. trade disagreements would start on December 1, Reuters reported, whereas White House Economic Adviser Larry Kudlow told reporters it would start from January 1.
In Asia, MSCI’s broadest index of Asia-Pacific shares, excluding Japan, slipped 0.3 percent on Tuesday.
Meanwhile, oil prices continued to rise after surging more than 4 percent at the start of the trading week. The gains come ahead of a critical OPEC meeting on Thursday, with energy market participants widely expecting the influential oil cartel and its allies to orchestrate a fresh round of production cuts.