Stocks sink on trade fears as yuan slumps to a decade low

  • Monday 05, August 2019 07:52 PM
  • Stocks sink on trade fears as yuan slumps to a decade low
European shares fell to two-month lows on Monday as anxiety over U.S.-China trade frictions drove investors toward traditional safe-havens including government bonds, while HSBC shares dipped 1% after the shock departure of Chief Executive John Flint.
The pan-European STOXX 600 index fell 1% adding to a 2.5% fall on Friday, its worst day so far in 2019, after U.S. President Donald Trump upped the ante on China by slapping 10% tariffs on another $300 billion in imports.

The basic resources index of miners and other commodities firms led declines, with metals prices falling as China's offshore yuan hit a record low, making it expensive for the world's biggest copper consumer to buy dollar-denominated metals.

HSBC shares matched the roughly 1% fall in the pan-European index after it announced Flint's departure after just 18 months in the job.

The Asia-focussed bank, grappling with the escalation of the trade war with China and a swing towards a new round of monetary easing, also reported a 15.9% rise in first-half pretax profit.

Shares in German group Metro fell 6% after Czech businessman Daniel Kretinsky's investment vehicle denied reports it was considering raising its takeover offer price for the German retailer and wholesaler.

Defensive plays real estate and utilities stocks both outperformed.