Portugal Colonial - Stocks rally fades along with hopes of quick US-China trade deal

It follows a jump in markets the previous day as Trump signalled that tariffs on China could be substantially lowered and that the United States would have a "fair deal" on trade with Beijing.

But China on Thursday said any claims of ongoing trade talks with Washington were "groundless".

Treasury Secretary Scott Bessent also tempered optimism, saying the two countries are "not yet" talking when it comes to lowering tariffs.

"The investing world is back to hanging onto every word out of the White House, but with such a confusing and often contradictory stance on tariffs, volatility is all we can really guarantee," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

City Index and FOREX.com analyst Fawad Razaqzada said that "until we see meaningful resolution on the tariff front, it may well be the case that markets remain in a choppy environment with larger-than-usual swings."

Wall Street opened mixed, while European equities were lower in afternoon trading.

In Asia, Tokyo closed 0.5 percent higher, while Shanghai ended flat and Hong Kong fell almost one percent.

Seoul fell after official data showed South Korea's economy unexpectedly contracted 0.1 percent in the first three months of 2025.

The dollar weakened as White House uncertainty boosted demand for the Swiss franc, the yen and gold, seen as safe-haven assets.

Bessent also said that in its talks with Japan on tariffs, Washington had "absolutely no currency targets", after repeated comments from Trump that he wants a stronger yen.

Meanwhile investors are also looking to a series of company results for signs of how tariffs may weigh on the outlook for the year ahead.

"Comments about tariffs from business leaders are omnipresent and investors want to know how companies plan to deal with potential cost pressures," said Russ Mould, investment director at AJ Bell.

Shares in consumer goods manufacturer Procter & Gamble slumped 3.5 percent after it cut its sales and profit forecasts, citing a pullback by consumers amid the tariff and economic uncertainty.

Shares in its British rival Unilever shed 0.5 percent although it said the impact of US tariffs on its products would be "limited", as it reported a dip in first-quarter revenue.

Shares in Pepsi slid 1.8 percent after it too cut its 2025 sales and profit forecasts.

Japanese auto giant Nissan predicted an enormous loss of around five billion dollars this year as US President Donald Trump's tariffs on car imports hit the industry.

In Paris, shares in luxury group Kering fell 2.5 percent after it reported a further sales slump at its flagship Gucci brand.

In Frankfurt, German sportswear giant Adidas gained around three percent as its profit almost doubled in the first quarter, beating expectations.

Meanwhile Nintendo shares gained as much as 5.5 percent after the gaming giant boasted of higher-than-expected demand in Japan for pre-orders of its Switch 2 game console.

- Key figures at 1330 GMT -

New York - Dow: DOWN 0.4 percent at 39,462.82 points

New York - S&P 500: UP less than 0.1 percent at 5,379.94

New York - Nasdaq Composite: UP 0.3 percent at 16,755.08

London - FTSE 100: DOWN 0.3 percent at 8,375.18

Paris - CAC 40: DOWN 0.1 percent at 7,473.14

Frankfurt - DAX: DOWN 0.2 percent at 21,913.61

Tokyo - Nikkei 225: UP 0.5 percent at 35,039.15 (close)

Hong Kong - Hang Seng Index: DOWN 0.7 percent at 21,909.76 (close)

Shanghai - Composite: FLAT at 3,297.29 (close)

Euro/dollar: UP at $1.1377 from $1.1317 on Wednesday

Pound/dollar: UP at $1.3305 from $1.3257

Dollar/yen: DOWN at 142.40 from 143.49 yen

Euro/pound: UP at 85.51 from 85.34 pence

West Texas Intermediate: UP 0.9 percent at $62.82 per barrel

Brent North Sea Crude: UP 0.7 percent at $65.65 per barrel

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T.Vitorino--PC