By Will Horner 

U.S. stock futures and European equities slipped Wednesday as concerns lingered over Brexit talks and a U.S.-China trade deal.

The pan-continental Stoxx Europe 600 index edged 0.4% lower as talks toward a draft plan for Britain to leave the European Union continued, but investors reassessed hopes that any deal would be approved by the U.K.'s Parliament.

"Why investors have been so optimistic on Brexit I don't know," said Michael Hewson, chief market analyst at CMC Markets U.K.For all the euphoria about the two sides being close to a deal, [Prime Minister Boris Johnson] still needs to get the deal through Parliament and arguably he has a harder job there because he doesn't have a majority in Parliament."

A combination of profit-taking after a recent run of gains for European equities and those doubts were weighing on the region's indexes, he said.

The British pound, which had hit a four-month high against the U.S. dollar a day earlier, fell 0.6%, while the FTSE 100 gauge for U.K. equities slipped 0.2% and the broader FTSE 250 fell 0.8%.

U.S. stock futures tied to the Dow Jones Industrial Average were down 0.3%. Changes in futures don't necessarily predict moves after the opening bell.

Chinese stocks edged lower on concerns that tensions with the U.S. over the Hong Kong protests would make striking a trade deal more complicated.

The Shanghai Composite Index fell 0.4% after the U.S. House of Representatives passed a series of bills backing pro-democracy protesters in Hong Kong, drawing a strong rebuke from China. A Chinese Foreign Ministry spokesman warned the U.S. against meddling in Chinese affairs and said the bill would damage relations between the two nations.

The development may complicate efforts to reach a trade agreement, analysts said.

"We got sideswiped by those headlines from China," said Stephen Innes, a market strategist for currency broker AxiTrader in Bangkok. "I'm not sure much is going to actually come from it, but it's just another thing to deal with."

Later Wednesday, the focus will shift to a swath of earnings reports from some of the U.S.'s biggest bellwethers, including Bank of America and PNC Financial Services Group, before Wall Street opens. IBM and Netflix will also report their third-quarter earnings after markets close in the U.S.

Investors will also get fresh cues on the health of the U.S. economy when the Commerce Department releases data on retail sales, providing an indication of whether American household spending remains a bulwark against signs of a global slowdown.

 

(END) Dow Jones Newswires

October 16, 2019 05:59 ET (09:59 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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