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Auto stocks limit losses for Europe, trade doubts linger

Auto stocks limit losses for Europe, trade doubts linger
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 29, 2019. REUTERS/Staff -
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(Reuters) – European shares struggled for direction on Wednesday as losses due to uncertainty around an interim U.S.-China trade deal were curtailed by a jump in auto stocks following merger talks between Fiat Chrysler and PSA Group.

The pan-European STOXX 600 index <.STOXX> was flat at 0810 GMT, with auto stocks <.SXAP> climbing 1.2% to their highest level in nearly six months.

Italian-American carmaker Fiat Chrysler <FCHA.MI> confirmed merger talks with French rival PSA <PEUP.PA>, a potential deal that could reshape the global auto industry and create a European powerhouse.

Shares of both companies rose between 7% and 8%, topping the benchmark STOXX 600 index.

However, concerns over the U.S.-China trade pact resurfaced after a U.S. administration official told Reuters that it might not be completed in time for the leaders of the two countries to sign in Chile next month.

Trade-sensitive tech <.SX8P> and commodity-linked stocks <.SXPP> were the biggest decliners among the major European sub-sectors.

Deutsche Bank <DBKGn.DE> fell 5% after reporting a loss for the second consecutive quarter, partly due to costs for a major restructuring.

Markets now await a raft of euro zone economic indicators that will shed light on the health of the trading bloc, along with an expected interest-rate cut at the U.S. Federal Reserve’s meeting later in the day.

(Reporting by Agamoni Ghosh and Lisa Pauline Mattackal; Editing by Arun Koyyur)

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