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European shares fall as trade dispute worries return to the fore

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European shares are lower Monday, as renewed US-China trade dispute fears have encouraged a cautious start to the week. A disappointing German business sentiment index also weighed. However, some upbeat deals news from Sky and Rangold, both worked to limit broader declines.

By around 1320 BST, the EUROSTOXX 600 was down 0.24%, while the EUROSTOXX 50 had lost 0.39%. Regional bourses were also negative. The German DAX fell 0.85%, the French CAC was 0.78% in the red, while the Spanish IBEX was 0.07% lower.

US-China trade dispute

Investor sentiment is less positive than it appeared last week, weighed down by the imposition of a raft of new US tariffs on Chinese goods. While the rate has currently been set at 10%, it could rise to 25% in 2019.

In addition, China has cancelled the upcoming trade talks between the two countries, suggesting the dispute and relating uncertainty, could last for longer than previously anticipated.

Also likely weighing on sentiment, was the news that the German Ifo business climate index slipped in September. The headline Ifo index fell to 103.7 from 103.9 in September.

“Firms’ assessments of their current business situation deteriorated marginally, but remain at a high level,” Ifo institute president Clemens Fuest, said. “Companies also scaled back their business expectations somewhat. Despite growing uncertainty, the German economy remains robust.”

Stock movers

Against that backdrop of broader news, there were, as always, some stock movers of note.

Porsche shares and VW shares were both lower, following an announcement from the luxury sportscar maker that it would no longer make Porsche vehicles powered by diesel engines. The renewed trade tensions also likely hurt.

Porsche shares fell 1.05% to €58.50, while VW shares lost 1.15% to trade at €152.60.

Sky shares, however, bucked the trend, rising after US firm Comcast won the auction with a superior bid to the one tabled by Fox.

Sky shares rose 8.745 to trade at £1,723.50.

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