Stock markets mostly fall as hopes of US-China trade deal dampen

LONDON — Stock markets were mostly lower on Thursday as China poured cold water on US President Donald Trump's comments talking up the prospects of a deal to end their trade war.

It follows a rally in markets the previous day as Trump signalledthat tariffs on China could be substantially lowered and that United States would have a "fair deal" on trade with Beijing.

But China on Thursday said any claims of ongoing trade talks with Washington were "groundless".

Treasury Secretary Scott Bessent also tempered optimism saying that the two countries are "not yet" talking when it comes to lowering tariffs.

"The investing world is back to hanging onto every word out of the White House, but with such a confusing and often contradictory stance on tariffs, volatility is all we can really guarantee," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

European equities fell on Thursday, with investors also looking to a series of company results for signs of how tariffs may weigh on the outlook for the year ahead.

"Comments about tariffs from business leaders are omnipresent and investors want to know how companies plan to deal with potential cost pressures," said Russ Mould, investment director at AJ Bell.

The dollar weakened as White House uncertainty boosted demand for the Swiss franc, the yen and gold, seen as safe-haven assets.

In Asia, Tokyo closed 0.5 per cent higher, while Shanghai ended flat and Hong Kong fell almost one per cent.

Bessent also said that in its talks with Japan on tariffs, Washington had "absolutely no currency targets", after repeated comments from Trump that he wants a stronger yen.

Seoul fell after official data showed South Korea's economy unexpectedly contracted 0.1 per cent in the first three months of 2025.

On Wall Street, the broad-based S&P 500 finished 1.7 per centhigher on Wednesday.

In company news, struggling Japanese auto giant Nissan issued a stark profit warning on Thursday.

Meanwhile Nintendo shares gained as much as 5.5 per cent after the gaming giant boasted of higher than expected demand in Japan for pre-orders of its Switch 2 game console.

French software company Dassault Systemes dropped around seven per cent in Paris after its net profit declined and it cut its 2025 annual operating margin forecast.

Luxury group Kering fell around four per cent in Paris after reporting a further sales slump at its flagship Gucci brand.

Also in Paris, carmaker Renault gained around two per cent as it announced plans to further cut costs as US tariffs shake up the global car market while reporting a slight increase in sales volumes.

In Frankfurt, German sportswear giant Adidas gained around three per cent as its profit almost doubled in the first quarter, beating expectations.

Key figures at 1100 GMT 

London - FTSE 100: DOWN 0.1 per cent at 8,399.18 points

Paris - CAC 40: DOWN 0.2 per cent at 7,464.88

Frankfurt - DAX: DOWN 0.3 per cent at 21,907.84

Tokyo - Nikkei 225: UP 0.5 per cent at 35,039.15 (close)

Hong Kong - Hang Seng Index: DOWN 0.7 per cent 21,909.76 (close)

Shanghai - Composite: FLAT at 3,297.29 (close)

New York - Dow: UP 1.1 per cent at 39,606.57 (close)

Euro/dollar: UP at $1.1383 from $1.1317 on Wednesday

Pound/dollar: UP at $1.3307 from $1.3257

Dollar/yen: DOWN at 142.48 from 143.49 yen

Euro/pound: UP at 85.57 from 85.34 pence

West Texas Intermediate: UP 1.2 per cent at $63.02 per barrel

Brent North Sea Crude: UP 1.1 per cent at $65.88 per barrel