Hong Kong tensions unnerve world stocks

European shares closed unchanged on Friday although rising US-China tensions hit Asia-exposed banks and luxury stocks, while hopes of a global recovery kept weekly gains intact for the main indexes. Stock markets had a volatile session as Beijing planned to impose a new security law in Hong Kong, raising prospects of fresh protests in the global financial hub and drawing a warning from US president Donald Trump that Washington would react "very strongly". "The US has ratcheted up pressure on China on several fronts and has sapped risk appetite ahead of the weekend," said Marc Chandler, managing director at Bannockburn Global Forex. Still, the Stoxx erased early losses of as much as 1.7 per cent as media stocks gained 1.3 per cent and euro zone banks rebounded from record low levels. Cyclical sectors such as miners, travel and leisure, and automakers have outperformed this week, helping the Stoxx 600 post its best week since April 10th on hopes that easing of coronavirus-driven lockdowns will spur a swifter economic recovery.

DUBLIN

Bank stocks across Europe rebounded from a series of negative sessions and Irish lenders were no exception. Bank of Ireland, AIB and PTSB all rose between 1 and 3 per cent but are still trading well below pre-pandemic levels.

Iseq heavyweight Ryanair was up 1 per cent €10.71, its highest level in several weeks, despite a string of bad airlines stories, including the news that CityJet plans to make more than 700 staff redundant – 60 per cent of its employees.

Building materials group CRH group rose 1 per cent to €27.51 while the State's largest hotel chain Dalata, one of the most hard-hit businesses, fell another 2.5 per cent to €2.79. Irish oil and gas explorer Providence Resources rose 13 per cent despite announcing that a new investor has had to delay the second tranche of its investment in the company, which amounts to £200,000 (€224,000).

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LONDON

Asia-focused British life insurer Prudential tumbled 9.3 per cent to the bottom of the pan-European Stoxx 600 index, which closed unchanged on the day. HSBC Holdings and Standard Chartered fell 5 per cent and 2.4 per cent respectively.

Rising tensions between the world's two largest economies have stalled a recovery in equity markets in recent weeks, with Mr Trump accusing China of mishandling the coronavirus outbreak. Clothing label Burberry rose 3.3 per cent as its chief executive said the company was encouraged by a "strong rebound in some parts of Asia" and is well-prepared to navigate through the Covid-19 situation.

EUROPE

Rising tensions between the world's two largest economies have stalled a recovery in equity markets in recent weeks, with Mr Trump accusing China of mishandling the coronavirus outbreak. Still, the Stoxx 600 index erased early losses of as much as 1.7 per cent as media stocks gained 1.3 per cent and euro zone banks rebounded from record low levels. Cyclical sectors such as miners, travel and leisure and automakers have outperformed this week, helping the Stoxx 600 post its best week since April 10th on hopes that easing of coronavirus-driven lockdowns will spur a swifter economic recovery. German real estate companies LEG Immobilien and TAG Immobilien rose 0.8 per cent and 6.6 per cent respectively after LEG said the companies were in talks about a potential combination of their businesses. The oil-heavy Norwegian index fell 1.6 per cent Luxury goods makers including LVMH and Kering , which draw a major part of their revenue from China, fell about 2 per cent.

NEW YORK

US stock indexes dropped on Friday as Sino-US tensions weighed on markets struggling to gauge the pace of economic recovery from the coronavirus. US president Donald Trump's statement on China's plan for a national security law in Hong Kong on Thursday raised concerns over Washington and Beijing possibly reneging on their Phase-1 trade deal. Eight of the 11 major S&P 500 sub-indexes were trading lower, led by energy as oil prices sank 5 per cent. Real Estate stocks were up in some defensive plays, while losses were limited in the consumer staples sector. Mixed retail earnings from Walmart, Best Buy and Home Depot earlier in the week had shown online shopping gaining traction due to the stay-at-home orders, a trend that could damage brick-and-mortar players. On Friday, Chinese ecommerce giant Alibaba Group reported better-than-expected quarterly profit, but its shares slipped 4.4 per cent. Smaller rival Pinduoduo's US-listed shares gained 9.6 per cent after posting upbeat earnings report. Hewlett Packard Enterprise fell 11.5 per cent after missing second-quarter revenue and profit estimates, hit by global lockdowns since February. – Additional reporting: Reuters