London — European stocks opened higher on Wednesday, recovering some of the losses made in the previous session when US President Donald Trump surprised world markets by saying a trade deal with China could wait until after the 2020 presidential election.
“Any doubts about the vulnerability of equity markets to the mood of the US president should have been dispelled, as his recent tweets and comments have nearly wiped out the entirety of November’s gains,” said Ian Williams, economics and strategy analyst at Peel Hunt. “For some months now there has been a concern that the weakness in the manufacturing sector might start to weigh on services activity and there has been some evidence of that in recent months, though not quite to the same extent,” wrote Michael Hewson, chief market analyst at CMC Markets, in a note to clients.
The US House of Representatives’ passage of a bill proposing a stronger response to a crackdown on Muslims in China’s west also added yet another layer of tension, drawing swift condemnation from Beijing on Wednesday. Beijing’s handling of civil unrest in Hong Kong has also drawn criticism from Washington.