European stocks steady but head for year’s biggest monthly decline

European equities eased off a two-month low yet remained on track for their biggest monthly decline of the year as concerns have persisted over global economic prospects in the face of an intensifying trade spat between the US and China.

Europe’s benchmark, the Stoxx 600, rebounded 0.5 per cent on Thursday from its lowest close since March 25. The index has fallen nearly 4 per cent in May, heading for its worst month this year. Volumes were thin on Thursday in many European markets as some countries, such as France and Germany, observed a public holiday for Ascension day. German and French markets were open though, with the Dax and CAC40 indices up 0.5 per cent apiece.

London’s FTSE 100 was little changed, easing off its lowest level since May 13. US S&P 500 futures meanwhile picked up 0.3 per cent.

Italy plans to sell as much as €6bn of medium-term sovereign debt on Thursday. “The auction is rather small, which should limit pressure in the current market environment, which is dominated by spread volatility,” said analysts from UniCredit.

The price of Brent crude was little changed, as the international oil benchmark headed for a 3 per cent drop in May.

Most major indices in Asia retreated, with the Topix in Japan closing down 0.3 per cent and the S&P/ASX 200 in Australia dipping 0.8 per cent. 

Among China-focused bourses, the CSI 300 fell 0.6 per cent while Hong Kong’s Hang Seng dropped 0.4 per cent. The Kospi in South Korea was the sole bright spot, rising 0.8 per cent.

Trade and technology ructions between the US and China have shown no signs of abating while expectations have grown for the world’s biggest economies to show subdued growth. 

Yields on US 10-year Treasury notes steadied after they dropped sharply on Wednesday to their lowest level since September 2017. Bond yields fall as their prices rise.

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