(Bloomberg) -- The euphoria in European and U.K. stock markets certainly didn't last long.
Europe's Stoxx 600 Index closed 0.5% lower on Monday as cyclical sectors such as miners and technology stocks dropped, after Bloomberg reported that China wants more talks before signing Donald Trump's “phase one” deal. That's in stark contrast to Friday, when the gauge had its best day since January as Trump touted the partial deal between the two countries.
The European benchmark did manage to claw back some losses after Global Times Editor-in-Chief Hu Xijin said in a tweet that the U.S. and China made a breakthrough in trade talks last week, without saying where he got the information. In the U.S., the S&P 500 index turned flat following a negative start to the session.
In the U.K., the mood also soured after a jubilant end to the week, as the European Union warned that Brexit deal talks were still a long way from a breakthrough. The domestically-focused FTSE 250 Index, which soared 4.2% Friday amid hopes of a deal, fell 0.6%. U.K. banks, housebuilders and retailers all pared the previous trading day's gains.
“It did seem a little bit overdone given what had happened, and I think this morning we're probably seeing slightly more reality returning,” Ian Williams, a strategist at Peel Hunt, said by phone, referring to the move in U.K. equities at the end of last week.
Investors will now be keeping an eye on developments ahead of Thursday's EU summit for any breakthroughs regarding Brexit. “I think we just have to wait and see still, unfortunately, which is kind of where we've been for the last three years,” Williams said.
To contact the reporter on this story: Kit Rees in London at krees1@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Celeste Perri
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
