European stocks traded lower Thursday morning, with high-level trade talks between the U.S. and China set to commence against a backdrop of geopolitical tensions.
The pan-European Stoxx 600 reversed slight early gains to fall 0.5%, with basic resources rising 0.4% to lead gains while healthcare stocks slid 1.1%.
Trade negotiations between the world’s two largest economies are due to recommence in Washington later on Thursday, with the White House denying a report from the South China Morning Post (SCMP) that Chinese Vice Premier Liu He intends to leave after the first day of minister-level meetings. CNBC reported, citing a White House official, that Liu is still scheduled to leave on Friday evening.
The SCMP also reported that no progress was made between deputy-level delegations from Washington and Beijing on Monday and Tuesday, citing unnamed sources with knowledge of the meetings.
There had been reports Wednesday that China was considering a partial deal, but the White House official told CNBC that President Trump has yet to decide whether a breakthrough can be made.
Trump also faces a domestic backlash from fellow Republicans on his decision to withdraw U.S. troops from Syria, a move that has enabled Turkey to attack formerly U.S.-allied Kurdish militia in northeast Syria. Turkey’s lira slid on Wednesday, breaking through a perceived key support level of 5.85 against the dollar.
Meanwhile, Asian stocks rebounded Thursday after the New York Times reported Wednesday that U.S. President Donald Trump is set to grant licenses permitting American companies to sell nonsensitive supplies to blacklisted Chinese telecommunications giant Huawei.
Back in Europe, a meeting between U.K. and European Union Brexit negotiators has been delayed until Friday, Reuters reported, after the EU told British Prime Minister Boris Johnson that substantial concessions are required if a last-minute deal is to be agreed before the October 31 deadline.
On the data front, U.K. GDP estimates for August are due at 9.30 a.m. London time, along with manufacturing, services, industrial output and trade figures.
In terms of individual stocks, luxury goods maker LVMH climbed 4.1% to lead the Stoxx 600 after strong results, pulling fellow luxury brand Christian Dior 3.5% higher in early trade.
Danish bioscience company Chr. Hansen tumbled 10.8% after missing profit expectations, while Dutch health technology company Philips fell 8.2% after warning it will miss its 2019 margin goal, due to rising tariffs and falling margins in its Connected Care business.