Elliot Smith, Ryan Browne
European Markets: FTSE, GDAXI, FCHI, IBEX
Monday saw markets close lower after a U.S. crackdown on Chinese telecommunications giant Huawei weighed on the technology sector. Major European chipmakers saw a sell-off with reports that Germany’s Infineon had suspended shipments to Huawei.
However, markets rebounded Tuesday after the U.S. government temporarily eased some trade restrictions imposed on the company, in a move intended to minimize disruption for Huawei customers around the world. Google confirmed Tuesday that it had reversed a decision to cut ties with Huawei following the move.
Austrian semiconductor manufacturer AMS led Monday’s losses but climbed 4% as of Tuesday afternoon, while Italian rival STMicroelectronics was up over 3%.
In economic news, the OECD released its growth outlook, projecting global economic growth of 3.2% in 2019, down 0.1% from its March forecast, and an unchanged 3.4% in 2020. OECD chief economist Laurence Boone told CNBC Tuesday that U.S.-Sino trade tensions have “derailed global growth” and need to be dealt with at a multilateral level.
Meanwhile, investors stateside took their cues from international equity markets, with the Dow Jones Industrial Average trading around 100 points higher and the S&P 500 and Nasdaq indexes also in positive territory.
Oil prices initially traded higher as a result, but have since pared gains. Brent crude last changed hands marginally higher at about $72 a barrel while WTI crude slipped 0.1% to about $63.
Back in Europe, British Finance Minister Philip Hammond warned Tuesday that those on the “populist right” pushing for the U.K. to leave the European Union without a deal would be doing deliberate damage to the British economy.
The country is set to join its European Union neighbors in voting on the makeup of the next European Parliament this Thursday, with Nigel Farage’s Brexit Party currently leading the polls.
On the other end, Royal Mail shares were down over 7% by the closing bell with analysts expecting the former U.K. state postal monopoly to report a 40% slump in annual earnings Wednesday.