European stocks shrug off Wall Street weakness

James PHEBY
 

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.

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 quarter of 2017.

The weakness on Wall Street was put down to the fact that Trump was expected to issue a pair of executive orders later in the day targeting trade imbalances, including a public naming and shaming of countries responsible for the US trade deficit.

The move comes a week before Trump meets Chinese President Xi Jinping and is likely to be seen as a warning shot across Beijing's bow.

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 Zuma sacked finance minister Pravin Gordhan.

The news also 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.

"Equities appear to be bearing the brunt of the market's concern today. Interestingly we've not seen massive moves in the rand.

"It's lower against the dollar for sure -- but the fall was not as much as we might have expected."

Miners were also 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.

The rand languished at two-month dollar lows in late morning European deals.

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 1545 GMT -

New York - Dow: DOWN 0.1 percent at 20,705,71 points

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 0.6 percent at 3,500.93 (close)

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: UP at $1.0693 from $1.0681

Pound/dollar: UP at $1.2524 from $1.2465

Dollar/yen: DOWN at 111.48 yen from 111.70 yen

Oil - West Texas Intermediate: DOWN 10 cents at $50.25 per barrel

Oil - Brent North Sea: UP four cents at $53.17

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