Stocks - Europe Edges Higher After Trump's China Blast; Maersk Surges

© Reuters.

By Peter Nurse 

Investing.com - European stock markets traded largely flat Wednesday, with investors wary about U.S.-China relations, rising tensions in Belarus and ahead of the release of key European inflation data and minutes from the Federal Reserve.

At 3:45 AM ET (0745 GMT), the DAX in Germany traded 0.1% higher, the CAC 40 in France rose 0.1% and the U.K.'s FTSE index was unchanged.

The market overcame initial concern at harsh words by U.S. President Donald Trump saying late Tuesday that he had cancelled a scheduled session of trade talks with China at the end of last week because he "didn't want to talk to them."

The phase one trade deal has been the most stable point in this tempestuous relationship. But Trump's comments indicated that the deal may be in trouble. 

"We are approaching the period of peak risk," said UBS Global Wealth Management chief economist Paul Donovan in a morning note. Trump, he noted, could announce new tariffs ahead of the election "to look tough on China," and put off the hit to U.S. purchasing power and the global economy until after the election.

Markets will pay close attention to minutes from the Federal Reserve's recent meeting due later in the day, as well as any progress towards an interim virus relief package.

Back in Europe, U.K. inflation surprised to the upside, with CPI coming in at 0.4% in July month-on-month and 1.0% year-on-year, above the -0.1% and 0.6% expected. EU data is released, later Wednesday.

In corporate news, Rio Tinto (NYSE:RIO) stock dropped 0.7% after the U.K.-based miner cut its refined copper guidance for the year after problems with a smelter at its Kennecott mine in Utah. 

Staying in the sector, Hochschild Mining (LON:HOCM) stock dropped 5.9% after reporting a sharp fall in pretax profit for the first half of 2020 due to Covid-19 related production stoppages.

On the flip side, AP Moeller-Maersk (CSE:MAERSKb) stock rose 4.9% as the shipping giant reinstated full-year guidance after posting better-than-expected second-quarter earnings. 

RWE (DE:RWEG_p) shares fell 3.0% after the German energy group announced a capital raise to fund its investment in renewables.

Oil prices edged lower Wednesday, consolidating after overnight gains on the back of a drop in U.S. crude inventories of 4.3 million barrels, industry data from the American Petroleum Institute showed after the markets closed on Tuesday.

Investors will now look for the official U.S. government inventory data, due at 10:30 AM ET (1430 GMT), as well as the meeting of experts from the Organization of the Petroleum Exporting Countries and allies including Russia, a grouping known as OPEC+, to review adherence to their deal on oil output cuts.

U.S. crude futures traded 0.6% lower at $42.85 a barrel, while the international benchmark Brent contract fell 0.7% to $45.16. 

Elsewhere, gold futures fell 0.8% to $1,996.90/oz, retreating below the $2,000 level. EUR/USD traded 0.1% higher at 1.1932, on course to touch $1.20 for the first time in over two years.