European markets cautious as Fed-induced rally subsides and trade war looms

European markets edged down on Tuesday as the dust settled on last week’s rally and concerns over a trade war tempered gains. Read More...

European markets were cautious on Tuesday as the dust settled on last week’s rally and concerns over a trade war tempered gains.

The Stoxx 600 SXXP, +0.05% and the DAX DAX, -0.05% remained flat as disappointing German economic sentiment data wiped out earlier slight gains, while the CAC PX1, +0.20% climbed 0.2% on a quiet morning for European stocks.

The FTSE 100 lost ground to trade 0.1% up after U.K. employment data was as expected.

What’s moving the markets?

The dust has settled on last week’s dovish comments from several members of the Fed as European stocks returned to quiet trading on Tuesday.

German economic sentiment data came in lower than expected for July as struggling industrial orders and global trade tensions ramped up pessimism.

Speaking to MarketWatch, CMC Markets analyst David Madden said: “The bullish move that some equity markets enjoyed thanks to the slight improvement in US-China trade talks, and the chatter about the Federal Reserve lowering rates, has run out of steam, and some traders are taking a breather.”

The trade dispute between the world’s two largest economies continues to hold the attention of markets, with U.S. Treasury Secretary Steve Mnuchin suggesting he could travel to Beijing this week if phone calls progress well.

Donald Trump dampened hopes of a resolution on Monday, highlighting the U.S. was receiving billions of dollars in tariffs from China with “possibly much more to come.”

Which stocks are active?

Irn-Bru maker AG Barr BAG, -24.97% plunged 26% after issuing a profit warning due to disappointing spring and early summer weather and challenges with its Rockstar and Rubicon drinks. The soft drinks producer said profits would be 20% lower this year than in 2018.

U.K. fashion brand Burberry BRBY, +11.63% reported a 4% like-for-like sales boost in the second quarter as shoppers were taken by new chief designer Riccardo Tisci’s collections, particularly in China. Shares jumped 14%, leading the FTSE 100 risers.

Norwegian telecoms giant Telenor TEL, -3.87% fell 5.4% after the company missed net profit expectations in the second quarter due to errors discovered in its Bangladeshi division. Telenor also trimmed its guidance for the year.