November 21, 2019 / 10:11 AM / 16 days ago

Trade woes knock European shares for the fourth day; Thyssenkrupp slumps

(Reuters) - European stocks dropped for a fourth straight day on Thursday as mixed headlines about U.S.-China trade talks muted risk appetite, while German conglomerate Thyssenkrupp suffered its worst day in nineteen years after scrapping its dividend.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 12, 2019. REUTERS/Staff

Thyssenkrupp (TKAG.DE) tumbled more than 13% as it warned of deeper losses and asked investors for yet more patience over its turnaround.

The major indexes were broadly lower with the pan-European STOXX 600 set for its first weekly drop in seven.

European miners .SXPP, among the most vulnerable to trade headlines, led sector losses, dropping more than 1%, while technology .SX8P and industrials .SXIP lost about 0.4%.

Fears that agreement of an initial trade deal between United States and China could slide into next year, as well as political tensions between the two sides due to the U.S. passing legislation backing protesters in Hong Kong, weighed on investor sentiment.

However, markets closed off of their session lows, with another report claiming the U.S. could delay tariffs on Chinese imports even if a trade deal was not reached by Dec. 15.

“The U.S. and China will struggle to reach a phase-one trade deal, if they reach a deal at all,” said Jeroen Blokland, senior portfolio manager at Robeco.

“While a base case scenario of a marginal improvement in global growth and a return of positive earnings growth still applies, recent developments mean it could take longer for this scenario to materialize,” he added.

The volatility gauge on euro zone blue-chips .V2TX, hit a three week high before closing at session lows.

The STOXX 600 is now about 2% below a four-year peak hit two weeks ago, which was largely driven by better-than-expected earnings and hopes that a trade truce between United States and China was imminent.

Royal Mail (RMG.L) slumped 14% as Britain’s former postal monopoly said it was running behind schedule with planned reforms as it grapples with threatened labor unrest and a slowing UK economy.

Centrica Plc CAN.L logged its biggest one-day percentage rise in over a decade after the utility said it was on course to meet its full year earnings targets and raised its expected efficiency savings.

British American Tobacco (BATS.L) rose nearly 4% as the U.S. dropped a proposal to sharply cut nicotine levels in cigarettes.

Reporting by Medha Singh in Bengaluru; Editing by Kirsten Donovan

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