European shares step back, Trump’s China response awaited

(Reuters) – European shares pulled back on Friday as market participants turned their focus to Washington’s response to the Chinese parliament’s approval of a national security law for Hong Kong, but major indexes were on course to finish May with solid gains.

The pan-European STOXX 600 index <.STOXX> fell 0.9% by 0709 GMT, with U.S. President Donald Trump due to announce his policy moves that could escalate tensions between Washington and Beijing.

Automobiles and parts makers <.SXAP> led declines with a 2.5% drop, while travel & leisure <.SXTP> and banks <.SX7P> fell more than 2% each.

Still, hopes of a global economic recovery as policymakers unleashed stimulus programmes and several countries emerged from lockdowns put the STOXX 600 on course for a 3.6% monthly gain.

Hugo Boss AG fell 4.4% after Jefferies downgraded the stock to “hold”, while Renault SA slid 4.5% on news that it was launching talks with unions to restructure several French car plants and confirmed plans to cut around 15,000 jobs worldwide.

Coffee maker JDE Peet’s , one of the few big companies to go public during the coronavirus crisis, jumped 11.3% at the start of trading on Euronext in Amsterdam.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu)