European stocks pause for breath after wild trade ping pong

LONDON (Reuters) – European shares steadied on Thursday after a red-hot rally, as mixed signals on a U.S.-China “phase-one” trade deal discouraged investors from making risky bets.

Stocks were on a roller coaster ride this week as investors found it difficult to demystify messages from U.S. President Donald Trump on the trade war.

The comments during his London visit for the NATO summit swung wildly with him saying talks with China were going “very well” at one meeting, while warning that the deal may come only after elections in November 2020 at another.

The pan-European STOXX 600 () rose 0.1% by 0920 GMT, mainly driven by utilities, healthcare and real estate sectors as investors were seeking shelter under bond proxy names until clarity emerged on the trade deal.

German blue-chip index (), home to major industrial exporters, fell 0.3%.

“Back to 2019 and we are living in a pre-December 15th world where one headline or tweet on trade has the ability to turn a good day into a bad one and visa-versa,” Deutsche Bank (DE:) strategist Jim Reid said.

A further set of U.S. tariffs on Chinese goods is set to take effect on Dec. 15.

Luxury stocks were the pick of the day after Bloomberg reported that Gucci-owner Kering (PA:) held “exploratory” talks about a potential deal with Italian luxury puffer coat maker Moncler (MI:).

The news sent Moncler’s shares up 11%, also boosting its local peers Salvatore Ferragamo (MI:) and Tod’s (MI:) shares up 3%.

The rally in luxury stocks come as a relief after pulling back on Tuesday on Washington’s threat with punitive duties of up to 100% on champagne, handbags and other French products imports from France.

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