Market Update – European Indices React to Trade Tensions
The European stock markets exhibited mixed results during Thursday’s trading session, following recent comments from U.S. President Donald Trump regarding potential new tariffs. On Wednesday, Trump announced plans to impose a 25% customs duty on imports from the European Union, heightening trade tension.
The European Stoxx 600 index concluded the session down 2.56 points, or 0.46%, closing at 557.11 points.
In Germany, the DAX index experienced a decline, falling 243.22 points, or 1.07%, to settle at 22,550.89 points.
Conversely, the British FTSE 100 index rose by 24.75 points, or 0.28%, closing at 8,756.21 points.
The French CAC 40 index dipped by 41.40 points, or 0.51%, finishing at 8,102.52 points.
The automotive sector in Europe saw a significant decline, with shares dropping by 4%. This downturn is attributed to escalating trade friction between the United States and other global markets. Recent data indicated a 2.6% year-over-year fall in passenger car sales, further dampening industry sentiment.
Ferrari’s stock fell by 8% after Exor, the holding company of the Italian Agnelli family, announced the sale of approximately 4% of its stake in the luxury automaker.
In contrast, Rolls Royce in the Aviation and Defense sector saw its shares rise by 16%. This increase followed the company’s announcement of improved medium-term targets and stronger-than-expected annual results, which also included a boost in shareholder dividends.
On the downside, British construction materials company shares plummeted by over 6% after it reported disappointing annual revenue figures despite launching a £100 million (approximately $126.7 million) share buyback program.
During the inaugural meeting of his cabinet this week, President Trump reiterated his stance on trade policies, stating that customs duties on goods from Canada and Mexico would soon resume. He emphasized his intentions to impose the new tariffs on European imports, asserting that the U.S. is at a disadvantage in trade relations due to unfair practices.
“We will announce it very soon,” Trump stated, expressing frustration over trade balances. He pointed out perceived inequities in market access for U.S. agricultural products and automobiles.
A spokesperson for the European Commission responded firmly, stating that the EU would counter any unjustified trade barriers, emphasizing a commitment to free and equitable trade practices.
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