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European markets edge higher; Axel Springer leaps 20% on KKR investment talks

Elliot Smith
  • China threatened Wednesday to use its dominance in rare earth minerals to escalate the ongoing trade war with the U.S.
  • The pan-European Stoxx 600 on Wednesday reached its lowest point since March 11 as trade fears and political uncertainty weighed on investor sentiment.

European markets recovered steadily Thursday but remained on course for the year's biggest monthly decline amid persistent escalations of the U.S.-China trade war.

The Stoxx 600 was up by 0.3% in afternoon trade, led by media stocks with a climb of 1.4%, while autos dropped 0.8% after U.K. car production figures almost halved in April, with factories imposing a Brexit shutdown .

The Chinese state newspaper Wednesday used the history-laden phrase "don't say we didn't warn you," indicating trade tensions between the world's largest economies. Chinese Vice Foreign Minister Zhang Hanhui followed this up Thursday by equating U.S. trade provocations to "naked economic terrorism."

Asian stocks traded mostly lower Thursday afternoon, mainland Chinese indexes leading the losses with the Shenzhen component shedding 1.27%.

The focus of China's renewed threat has been on its dominance in rare earth minerals, which are crucial to the production of a host of technology products, including iPhones and electric vehicles. The Pentagon is reportedly working to reduce U.S. reliance on Chinese rare earth minerals in light of the threat.

Back in Europe, a poll conducted in Germany on Wednesday revealed that most Germans do not see Angela Merkel's heir apparent, Annegret Kramp-Karrenbauer, as fit to replace her, denting the party's hopes for a smooth leadership transition.

A Reuters poll found that investors remain deterred from scooping up cheap FTSE 100 shares while the U.K.'s drawn out exit from the European Union remains undetermined. Meanwhile, British Chancellor of the Exchequer, Philip Hammond, threw his weight behind candidates opposing the possibility of a "no deal" Brexit in the race to replace resigning Prime Minister Theresa May.

Speaking to Sky News Thursday, Hammond has left open the option of supporting a vote of no-confidence against the next Prime Minister to stop them pursuing a course of action which is "not in Britain's interests."

In terms of individual stocks, German publisher Axel Springer SPR-DE soared 20% after it revealed talks were underway with private equity house KKR over a potential strategic investment. Shares in Swedish radiation company Elekta EKTA.B-SE continued to soar, adding another 19% to Wednesday's gains on the back of strong fourth-quarter results.

Danish medical equipment maker Ambu AMBU.B-DK traded 6.2% lower in the afternoon session, its share price continuing to suffer two weeks on from its CEO stepping down on May 15.

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