By Geoff Smith
Investing.com - Europe’s stock markets were in retreat again on Wednesday morning after President Donald Trump kept the world guessing about the future direction of U.S. trade policy with a speech that, on balance, did more to talk up the lingering risk of no trade deal with China.
On another heavy day for earnings, Italian luxury group Salvatore Ferragamo (LON: 0P52 ) stood out with a gain of 3.8% after posting figures that showed it had withstood a 45% drop in sales in Hong Kong in the quarter, thanks in large part to greater spending in mainland China.
Together with similar (if less dramatic) drops reported by Kering (PA: PRTP ) and LVMH (PA: LVMH ), Ferragamo’s figures suggest that the biggest takeaway from the Hong Kong violence for Europe’s Asia-heavy luxury groups will be that Chinese shoppers can now easily replace trips to a shopping hub that was once unique in the region.
Elsewhere, Spanish banks continued to underperform amid fears for the future course of Spain’s economic policy under a prospective left-wing coalition. The center-left PSOE and far-left Unidos Podemos sealed a preliminary agreement on forming a new government on Tuesday, although they will still need votes from other parties to secure a stable majority in parliament.
Santander (MC: SAN ) was down 3.2%, while BBVA (MC: BBVA ) was down 2.4% and Bankia (MC: BKIA ) – which depends more on the home market than either of its two bigger rivals – was down 4.4%. The IBEX 35 was down 1.4% and is now down 2.4% over the last week.
In the U.K., meanwhile, independent oil company Tullow Oil (LON: TLW ) fell over 20% after announcing that the l it had discovered in Guyana was a heavy, sour blend that would be hard to commercialize. Utility SSE (LON: SSE ) rose 1.7% after first-half results that benefited from the reinstatement of payments by the U.K. capacity market which had previously been the subject of a challenge from the European Commission.
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