UPDATE 2-European shares cautiously dip ahead of G20 meeting

Published 30-11-2018, 10:36 pm
© Reuters.  UPDATE 2-European shares cautiously dip ahead of G20 meeting
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* STOXX 600 down 0.3 pct, DAX down 0.4 pct

* Autos stocks down 1

* Miners also down on weakest China factory growth in 2 years (Adds closing prices)

By Helen Reid

LONDON, Nov 30 (Reuters) - Weakened in morning trading by poor data from China, European shares closed lower on Friday ahead of Saturday's crucial G20 talks between U.S. President Trump and China's Xi Jinping over trade.

The pan-European STOXX 600 .STOXX ended the session down 0.3 percent and on a 1.2 percent loss over the month after a disappointing earnings season.

Germany's DAX .GDAXI , the most sensitive to China due to its big exporters, fell 0.4 percent.

German blue chip companies posted their fourth straight month of losses, with a 1.6 percent dip in November - the longest losing streak since 2008.

Investors' hopes of a partial recovery in stock markets in December - known as a "Santa rally" - hang on the leaders' discussions resulting in a truce or de-escalation of the U.S.-China trade war.

"There are only two people in the world that can deliver a Santa rally, Trump and Xi, and I don't see that happening," said Peter Garnry, head of equity strategy at Saxo Bank in Copenhagen.

Garnry saw a 60 to 65 percent chance of the Trump-Xi talks resulting in "no deal".

China reported its weakest factory growth in more than two years on Friday, reigniting fears about growth ahead of crucial trade talks. weak data out of China is increasingly a little bit of a surprise. Most investors would have anticipated that at least some of that stimulus six months ago would have had an impact, but this really tells us how big the headwinds are," said Garnry.

Autos stocks .SXAP lost 1 percent, on the data and anxiety over tariffs.

German car bosses are finalising plans to visit the White House next week to discuss trade policy, German and U.S. officials said. problem with Europe is that ... quite a lot of our industrial supply chain and capital goods manufacturers have at least some exposure to the autos sector, so you can't get away from it," said Ian Ormiston, European smaller companies fund manager at Merian Global Investors.

Mining stocks .SXPP fell 0.9 percent, hit by growth fears over China, the world's top metals consumer.

Among the biggest drags on the STOXX were also luxury goods conglomerates Kering PRTP.PA and LVMH LVMH.PA , down 1.2 percent and 1.5 percent respectively. Luxury stocks have been especially sensitive to slowing growth in China, high-end brands' biggest market.

Zalando ZALG.DE fell 4.4 percent after Kepler Cheuvreux cut its price target on the stock, saying it has become more sceptical about the long-term potential for margins at the online retailer. Autos earnings Nov 30

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