European markets had a tepid opening to third-quarter trading as investors weighed further signs of economic rebound in China against a feared rise in tensions with the US.
The continent’s composite Stoxx 600 was close to flat — after recording little change on Tuesday — as investors considered mixed signals from Asia where markets rose on Chinese data that showed a second straight month of expansion in the world’s largest manufacturing sector.
However, the recovery signal came on the same day that Beijing passed a law tightening its grip on Hong Kong, a move that has been condemned by the US, Europe and Australia — as some investors worry about deteriorating relations between the US and China.
The UK benchmark FTSE 100 slipped 0.1 per cent as the country passed the deadline to request an extension to the Brexit transition period beyond the end of this year, and as 100 business figures sent a letter to Prime Minister Boris Johnson to warn that a no-deal exit would be “hugely damaging”.
The cautious start to trading came as investors awaited an early indicator of US employment set to be released later on Wednesday, with S&P 500 futures down 0.2 per cent.
“The new quarter is starting somewhat mixed in the equity markets,” said Sebastien Galy, senior macro strategist at Nordea Asset Management, as investors assess an uneven rate of recovery across different countries.
Hong Kong’s stock market was closed for a public holiday, while China’s CSI 300 index of Shanghai- and Shenzhen-listed…