European Shares Snap Four-session Winning Streak

European stocks fell on Friday after recent sharp gains as investors braced themselves for U.S. Donald Trump’s press conference later today amid a deepening rift with Beijing over Hong Kong.

Trump is expected to speak later today in a press conference after China’s parliament approved the controversial security law on Hong Kong, undermining the city’s reputation as a financial hub with substantial autonomy.

The pan European Stoxx 600 fell 1.2 percent to 351.23, snapping a four-session winning streak. The German DAX lost 1.5 percent, France’s CAC 40 index gave up 1.2 percent and the U.K.’s FTSE 100 was down about 1 percent.

French automaker Renault plunged 6 percent after announcing it would lay off about 15,000 of its employees worldwide. Peugeot lost 3 percent.

German automaker Volkswagen tumbled 3.2 percent after it agreed to invest 2.1 billion euros ($2.33 billion) in two separate Chinese electric vehicle players.

Hugo Boss plummeted 7 percent after Jefferies downgraded the stock to “hold”.

Financials were coming under selling pressure in London, with Asia-focused banks HSBC and Standard Chartered falling 2.6 percent and 3.3 percent, respectively. Insurer Prudential tumbled 3.2 percent.

AstraZeneca gained about 2 percent. The drugmaker said its Tagrisso lung-cancer drug “demonstrated unprecedented patient benefit” in a Phase III trial.

Engine maker Rolls-Royce Holdings slumped 9.5 percent after S&P Global downgraded its credit rating to junk.

In economic releases, German retail sales logged its largest fall since 2007 as most of the stores were closed amid coronavirus pandemic, data from Destatis showed.

Retail sales turnover decreased 5.3 percent on a yearly basis in April, following a 4 percent drop in March. This was the biggest fall since January 2007 but slower than the expected decline of 12 percent.

The French economy contracted less than initially estimated in the first quarter but remained in a deep recession as coronavirus pandemic weighed on spending, investment and exports, detailed results from the statistical office Insee showed.

Gross domestic product fell 5.3 percent sequentially instead of 5.8 percent decline estimated initially, which was the biggest fall since the series began in 1949.

Eurozone inflation dropped to a four-year low of just 0.1 percent in May, the official Eurostat agency said.

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