US President Donald Trump rejected an Iranian proposal for talks to end the conflict on Sunday. 'It remains unclear how the maximalist demands on both sides are to be reconciled,' explained Jochen Stanzl, chief market analyst at Consorsbank. However, investor hopes that US President Donald Trump's upcoming visit to China could break the diplomatic deadlock limited the losses on the exchanges. Trump is urging China to leverage its influence over Tehran to resolve the conflict.
GOLD PRICES UNDER PRESSURE
Renewed investor concerns regarding the situation in the Middle East weighed on gold prices. The precious metal depreciated by approximately one percent to 4,665 dollars per troy ounce. The rebound in oil prices, in particular, stoked fresh fears of inflation and rising interest rates. Higher rates from major central banks typically dampen demand for non-yielding assets. Investors are now looking to the US inflation report for April, due on Tuesday, for further direction.
Meanwhile, a spike in Chinese inflation bolstered industrial metal prices. Copper, nickel, tin, and aluminum advanced between 0.5 and 1.5 percent. Chinese producer prices reached their highest level in nearly four years in April, climbing 2.8 percent year-on-year. Analysts polled by Reuters had expected a more modest increase of 1.6 percent. Consumer prices also rose more sharply than anticipated, up 1.2 percent, signaling robust domestic demand. As China is by far the world's largest consumer of copper, the nation's economic health remains the primary driver of demand and pricing for the metal.
EARNINGS IN FOCUS
In individual stocks, food delivery service Delivery Hero provided a talking point, surging ten percent to 21.96 euros. Dutch technology investor Prosus sold a five percent stake for approximately 335 million euros to Aspex Management. The Hong Kong-based asset manager paid 22 euros per share.
Corporate balance sheets and outlooks were also in the spotlight. Surprisingly weak cash flow spooked investors in engineering group Gea: the shares reversed gains to fall 5.6 percent, ending at the bottom of the Dax, despite the Dusseldorf-based company reporting higher revenue and earnings in the first quarter on the back of strong demand.
Hannover Re, TKMS, and Adesso also failed to impress investors with their figures, with shares declining between three and six percent.
Conversely, Hypoport and Aurubis saw demand following well-received financial results, advancing by approximately 1.5 and one percent, respectively.
Across Europe, luxury goods stocks were among the biggest laggards, falling 2.4 percent amid the tensions in the Middle East. Defense stocks also trended lower, extending Friday's sell-off with a 2.2 percent decline.
(Reported by Sanne Schimanski. Edited by Hans Busemann. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for corporate and markets).)
