Europe close: Stocks edge higher, but investors cautious ahead of G20
Shares on the Continent edged a tad higher on Thursday with investors cautious ahead of the start of the G20 leaders summit the next day.
According to a joint report from the South China Morning Post and Politico, citing sources familiar with the situation, Washington and Beijing were set to announce a trade truce on Saturday.
But according to The Wall Street Journal, Chinese President Xi Jinping was planning to set a number of terms in exchange for settling the trade spat, raising doubts about whether the two countries' leaders would indeed agree to restart talks.
"Global markets are in a holding pattern today, as a distinct lack of notable shifts on the economic front maintain a focus on the G20 summit," said IG's Chris Beauchamp.
"Donald Trump has a relatively packed agenda ahead, and for the most part he has been preparing by providing a hard-line, critical stance against both friends and foes alike. There is certainly an element of optimism around what could come from Saturday’s meeting between Xi Jinping and Trump, yet both sides are certainly approaching the meeting with a large dose of scepticism given prior failings."
By the end of trading, the benchmark Stoxx 600 was flat at 382.21, alongside a gain of 0.21% for the German Dax to 12,271.03 while the FTSE Mibtel put on 0.26% to 21,110.87.
In parallel, front month Brent crude oil futures were edging up by 0.03% to $66.51 a barrel on the ICE.
To take note of, there were continued reports on Thursday regarding the possible deterioration in German Chancellor Angela Merkel's health.
The latest headlines on the economic front were also quite glum, with harmonised consumer prices in Spain printing well below economists' forecasts and economic sentiment across the euro area the weakest in 34 months.
According to Spain's national statistics institute, the rate of increase in the country's harmonised CPI index slowed from 0.9% in May to 0.6% for June (consensus: 0.8%).
Germany's Federal Office of Statistics on the other hand confirmed a drop in the harmonised CPI rate from 2.1% for May to 1.3%.
In parallel, the European Commission's economic sentiment index retreated from a reading of 103.8 for May to 102.3 in June.
On the corporate side of things, shares of Hennes&Mauritz flew off the shelves after the fashion retailer said that sales of its summer collections had gotten off to a good start and that it would open fewer new stores in order to head-off digital contenders.
Stock in Bayer was edging higher after the company announced the creation of a new supervisory board committee to help advise management in the ongoing litigation linked to its glyphosate-based weed-killer Roundup.
Analysts at Liberum greeted the news, adding that in their opinion, financial markets were "massively overestimating" the likely litigation losses in which the company was likely to incur.
Providing a further boost to Bayer's shares, activist investor Elliott Associates revealed it had amassed a stake in the firm worth €1.1bn.
BASF was also on the front foot after announcing it would move to reduce its headcount by 6,000 globally.