Instead of the conciliatory tone on China trade talks that the market has been hoping for President Trump opted for the tougher approach in his comments yesterday, threatening to increase tariffs if the current round of Sino-US negotiations doesn’t produce some sort of an interim agreement.
The Chinese delegation has been pushing for a rollback in tariffs and recently said that the US side had agreed to it, something US negotiators and Trump have denied. Now the two sides are back at loggerheads and investors’ sentiment is sinking.
Coca-Cola (NYSE:KO) shoots up as pre-Christmas revenues rise
The FTSE is nearly half a point lower – and sliding - with ITV (LON:ITV), insurers and miners all trading lower, the latter hardest hit by China comments. ITV saw some profits being taken off the table after yesterday’s post-trading update rally while trade tensions and the escalation of riots in Hong Kong put HSBC (LON:HSBA) and other major banks under pressure.
Coca Cola provided a rare bit of counterbalance, shooting to the top of the index after reporting a solid quarterly increase in revenue. Sales in the fourth quarter have already started accelerating ahead of the busy pre-Christmas period.
Sterling firms against euro
Sterling is trading in synch with election news, rising against the euro after polls showed that the Conservatives have increased their lead over Labour in the last three days. The pound is reacting the most to the prospect of a simple majority and a stable government and any news pointing to a hung parliament is causing more volatility. The pound dipped against the dollar in early trade but has since recovered slightly.
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