BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may open lower on Friday as Middle East tensions and renewed anxiety over Sino-U.S. trade negotiations kept investors' risk appetite in check.
After Iran shot down a U.S. military drone over the Strait of Hormuz, U.S. President Donald Trump suggested the downing of the drone may have been unintentional but still refused to say whether the U.S. would retaliate, repeatedly saying, 'You'll find out.'
Iran said that it is 'ready for war', adding to the friction between the countries.
Meanwhile, a trade agreement between China and the United States is 'within reach' as long as Donald Trump and Xi Jinping have the 'courage' to compromise, a senior U.S. business representative said.
The two presidents will sit down for face-to-face talks at the G20 summit in Osaka, Japan, next week.
Asian markets struggled to find direction and the U.S. dollar is on course for a weekly loss against major currencies while oil prices eased after logging their biggest single-day gain since December 2018 on Thursday.
Flash Purchasing Managers' survey results from euro area and public sector finance data from the U.K. are due later in the day, headlining a light day for the European economic news.
Overnight, U.S. stocks rose on expectations the Federal Reserve may lower lending rates by a quarter point in July and by the same increment in September.
The Dow Jones Industrial Average gained 0.9 percent and the tech-heavy Nasdaq Composite added 0.8 percent while the S&P 500 surged 1 percent to reach a record closing high.
European markets ended Thursday's session higher as investors reacted to interest rate decisions from the Federal Reserve, the Bank of Japan and Bank of England.
The pan European Stoxx 600 gained 0.4 percent. The German DAX rose 0.4 percent while France's CAC 40 index and the U.K.'s FTSE 100 both inched up 0.3 percent.
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