European rally runs out of steam

A REBOUND on European markets faltered late in trading yesterday as sentiment remained fragile after the worst week for stocks in eight months.

The FTSE 100 erased a 1pc gain to sink into the red for a third straight day as a rally in Europe ran out of stream.

The recovery struggled in afternoon trading despite tariff tensions between the White House and Beijing easing and trade data from China signalling that its exports are holding up in the trade war.

David Madden, at CMC Markets, explained that European investors “were

‘The global equity rout originated in the US, and the moves continue to be US driven’

keen to cash in their holdings as Wall Street still has several hours more trading left”.

He added: “The global equity rout originated in the US, and the moves continue to be US driven.”

Global markets were still reeling from a two-day rout sparked by fears of climbing borrowing costs in the US and the impact of a trade war.

On Thursday, the FTSE 100 suffered its second correction of 2018 – a fall of more than 10pc from an index’s 52week high.

The index closed the week 4.4pc lower, its worst weekly performance since February’s stocks rout.

US tech stocks, which suffered the heaviest damage in the sell-off gripping Wall Street, led a recovery in New York and the S&P 500 snapped a sixday losing streak to post a 1.42pc gain.