European stocks shrug off tough Trump trade talk

 

European stock markets ended the week higher on bargain-hunting Friday, shrugging off weakness on Wall Street where tough talk on trade from US President Donald Trump's administration revived concerns about a global trade war.

In London, stock prices sagged under pressure from South Africa's political turmoil, which hit mining stocks on the FTSE 100. US stocks also finished lower, ending an otherwise strong quarter on a negative note.

But prices in Frankfurt and Paris, which had started the day in negative territory, ended the session higher as investors snapped up cheap bargains before they closed their books on the final day of the first quarter.

Jack Ablin, chief investment officer at BMO Private Bank, said investors frequently engage in "window dressing" at the end of a quarter, selling off stocks that have not performed well and boosting holdings that have outperformed.

The weakness on Wall Street was put down to the fact Trump signed an executive order tasking staff to pinpoint countries and goods responsible for America's nearly $50 billion a month trade deficit.

The move was accompanied by a series of aggressive comments from administration officials on trade, much of it aimed at China. Trump, on Twitter (Frankfurt: A1W6XZ - news) , predicted that a meeting next week with Chinese President Xi Jinping "will be a very difficult one in that we can no longer have massive trade deficits."

Still, some analysts believe the concrete actions from the Trump administration may be more moderate than the rhetoric suggests.

In London, investors digested unrevised data, which showed the British economy expanded by 0.7 percent in the final three months of last year despite jitters over Brexit.

In currency deals, South Africa's rand plunged after President Jacob Zuma sacked finance minister Pravin Gordhan.

The news sent shares in miner Anglo American (LSE: AAL.L - news) down by 2.9 percent, while finance group Old Mutual (Other OTC: ODMUF - news) topped the fallers' board with a 7.3-percent tumble.

"Stocks with exposure to South Africa plunged amid deep fears about the state of the country's government following the sacking of respected finance minister Pravin Gordhan," said Neil Wilson, analyst with ETX Capital.

Miners also were hit by softer metal prices, with Antofagasta (Other OTC: ANFGF - news) down 0.7 percent, BHP Billiton (NYSE: BBL - news) shedding 2.9 percent and Rio Tinto (Hanover: CRA1.HA - news) losing 2.5 percent.

- Rand fall -

The dollar surged five percent against the rand after the sacking of Gordhan, who had enjoyed the support of many international investors and had campaigned for budget discipline.

Gordhan was also widely admired by ordinary South Africans and veterans of the anti-apartheid struggle and there are fears his removal -- along with several top cabinet members -- could precipitate a split in the ruling African National Congress, the party of Nelson Mandela.

The decision comes as the government struggles to get a grip on the once-booming economy of South Africa, one of the continent's biggest and part of the so-called BRICS grouping that includes China.

- Key figures at 2040 GMT -

New York - Dow: DOWN 0.3 percent at 20,663.22 (close)

New York - S&P 500: DOWN 0.2 percent at 2,362.72 (close)

New York - Nasdaq (Frankfurt: 813516 - news) : DOWN less than 0.1 percent at 5,911.74 (close)

London - FTSE 100: DOWN 0.6 percent at 7,322.92 (close)

Frankfurt - DAX 30: UP 0.5 percent at 12,312.87 (close)

Paris - CAC 40: UP 0.7 percent at 5,122.51 (close)

EURO STOXX 50: UP 0.4 percent at 3,495.59

Tokyo - Nikkei 225: DOWN 0.8 percent at 18,909.26 (close)

Hong Kong - Hang Seng: DOWN 0.8 percent at 24,111.59 (close)

Shanghai - Composite: UP 0.4 percent at 3,222.51 (close)

Euro/dollar: DOWN at $1.0658 from $1.0679

Pound/dollar: UP at $1.2527 from $1.2467

Dollar/yen: DOWN at 111.31 yen from 111.86 yen

Oil - West Texas Intermediate: UP 25 cents at $50.60 per barrel

Oil - Brent North Sea: DOWN 13 cents at $52.83 per barrel

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