Trump trepidation weighs on stocks
Concerns about trade sent European shares tumbling yesterday as the United States prepared to announce hefty tariffs on Chinese imports, with banks, basic resources stocks and tech the worst-performing.
US President Donald Trump signed a presidential memorandum that could impose tariffs on up to $60bn (€47bn) on Chinese imports. Separately, the European Union secured an exemption from US tariffs on steel and aluminium imports set to come into force today.
The pan-European STOXX 600 index fell 1.6pc to its lowest level in more than two weeks, while Germany's exporter- and industrials-heavy DAX fell 1.7pc.
The mood was also dampened by a weaker than forecast business activity survey. Eurozone businesses rounded off the first quarter of 2018 with their slowest growth in over a year, much weaker than expected, as new business took another hit from a stubbornly strong euro. "Business sentiment has to be monitored carefully in the coming months, especially if trade tensions intensify, because any further significant deterioration in confidence indicators might signal that the balance of risks starts shifting to the downside," said UniCredit head of macro research Marco Valli.
Banks, which have been penalised recently amid weaker than expected macro economic data in Europe, were among the leading losers on Thursday. Their sectoral index fell 2.5pc to an 11-month low. The sector also suffered after the US Federal Reserve surprised the market with less hawkish rate guidance.
Deutsche Bank declined 2.9pc, after sharp losses in the previous session when the bank's finance chief said a strong euro and higher costs would impact revenues.