(Reuters) – European shares ended lower on Tuesday, with banking and energy stocks leading the losses on worries about escalating U.S.-China tensions even as a tech-powered rally saw New York’s S&P 500 hit an all-time high.
After hovering in the positive territory earlier in the session, the pan-European STOXX 600 <.STOXX> turned decidedly lower in afternoon trading. The index closed down 0.6%, still 15% below its record high.
On the other side of the Atlantic, the benchmark S&P 500 <.SPX> hit an intra-day high, recovering all its losses made since the onset of the coronavirus crisis in February, powered by a rally in Amazon <AMZN.O>, Apple <AAPL.O> and other tech-related companies. [.N]
“What we’re seeing is some consolidation in European markets given that in the past two months, we’re more or less trading sideways as opposed to the U.S. where growth stocks have been lifting the overall market,” said Matthias Bausch, senior cross asset strategist at Commerzbank.
“Liquidity is more important than earnings growth at the moment, and we have record high money supply growth in the U.S. and Europe.”
However, markets globally failed to make headway after the Trump administration on Monday expanded its curbs on China’s Huawei Technologies Co [HWT.UL], in a further escalation of tensions between the world’s two largest economies.
A lack of progress on the U.S. stimulus front has also disappointed investors.
“The current stimulus stalemate persists, but a deal will get done before the end of next month because that is when federal funding runs out,” noted Edward Moya, a senior market analyst at Oanda.
Banks <.SX7P> and energy <.SXEP> sectors were among the biggest drags on the STOXX 600, down more than 1%, with the latter hit a slide in oil prices. [O/R]
In earnings-driven moves, UK-listed miner BHP Group <BHP.AX> <BHPB.L> fell 2.6% as its annual profit fell 4%, missing analysts’ estimate, and it warned that most major economies except China will have to bear the brunt of a coronavirus-led downturn this year.
Danish jewellery maker Pandora <PNDORA.CO> tumbled 7.5% as it expected sales to decline this year by up to one-fifth, despite having reopened nearly all its stores.
Britain’s Marks & Spencer <MKS.L> fell 4.9% after it revealed plans to cut a further 7,000 jobs, dealing the latest blow to the beleaguered retail sector from the COVID-19 crisis.
Among the bright spots, British housebuilder Persimmon <PSN.L> jumped 8.0% after saying it would reinstate its dividend after an “excellent start” to the second half of the year.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Alison Williams)