European shares traded slightly lower on Tuesday, with investors monitoring the potential recommencement of U.S.-China trade talks and unfolding developments in Italian politics.
The pan-European Stoxx 600 slipped 0.2% in the opening minutes of trade, autos, construction and chemicals stocks leading losses with 0.5% declines while utilities edged 0.3% higher as most sectors and major bourses traded in the red.
Market sentiment appeared to improve after President Donald Trump said on Monday that Washington officials had been in touch with Beijing over reopening trade negotiations.
“China called last night our top trade people and said ‘let’s get back to the table’ so we will be getting back to the table and I think they want to do something,” Trump said at the G-7 summit.
But the president’s remarks were subsequently contradicted by Hu Xijin, editor-in-chief of the Global Times, who said in a tweet that negotiators from both countries did not talk over the phone. Hu’s tabloid is run by the People’s Daily, the official newspaper of China’s ruling Communist Party.
In other G-7 news, President Trump said he would meet Iran’s president, Hassan Rouhani, under the right circumstances in order to end a confrontation over the 2015 nuclear deal.
Meanwhile, the U.S. and France have reached a compromise agreement on France’s digital tax, French President Emmanuel Macron said Monday. Trump had earlier threatened to hit France with a retaliatory wine tax over the move, which would see the revenues of large tech companies like Facebook, Amazon and Google hit with a 3% levy.
Italian politics has emerged front and center once again as the ruling Five Star Movement (M5S) and the opposition Democratic Party (PD) appeared on the verge of a deal to form a new Italian government on Monday, after the PD indicated it had abandoned a veto on Giuseppe Conte serving another term as Prime Minister.
In terms of earnings, Scandinavian Airlines is due to report its interim third-quarter results. As for data, German GDP (gross domestic product) and French business sentiment figures are due Tuesday morning.