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European stocks slip as US tariffs spark renewed trade war fears

EU, Canadian and Mexican products will be affected.

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A worker inspecting rolls of steel (PA)

A worker inspecting rolls of steel (PA)

A worker inspecting rolls of steel (PA)

European stocks slipped on renewed trade war fears, with investors worried about the repercussions of US tariffs on steel and aluminium imports from the EU.

The news helped knock the FTSE 100 down 0.15% or 11.37 points to 7,678.2 points, while the French Cac 40 and German Dax closed lower by 0.5% and 1.4%, respectively.

An exemption granted by US president Donald Trump in March is set to expire on Friday, meaning EU steel will now face a 25% levy , while aluminium imports will be slapped with a 10% tariff.

Imports from Canada and Mexico will also be affected.

European Commission president Jean-Claude Juncker denounced the move as “protectionism pure and simple”, while a UK Government spokesman described it as “deeply disappointing”.

“Trade wars are driving market sentiment this afternoon with stocks sliding heavily,” Neil Wilson, chief market analyst at Markets.com, said.

“The EU has quickly responded in kind and it must be said that this hardly bodes well for the even bigger US-China trade spat.

“A full-blown international trade war is now more likely, although there remains plenty of time and room for manoeuvre for the main protagonists to avert such a development. ”

Sterling was nearly flat, trading down 0.03% against the euro at 1.138 and up 0.05 versus the US dollar at 1.329.

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UK stocks took a hit on Thursday (PA)

UK stocks took a hit on Thursday (PA)

UK stocks took a hit on Thursday (PA)

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In oil markets, Brent crude prices edged up 0.1% to 77.91 US dollars per barrel as data showed a bigger than expected drop in US crude inventories in the week to May 25.

In UK stocks, Taylor Wimpey was the worst performer on the FTSE 100 with shares down 11.05p at 190.15p.

Figures from the Nationwide Building Society released on Thursday showed house prices fell 0.2% in May, marking the third decline in four months.

It comes as a faltering economy, pressure on household budgets and the prospect of interest rate rises dog the housing market.

Away from the top tier, First Group shares sank nearly 19% as the transport firm swung to a £327 million full-year loss and announced the immediate resignation of its chief executive Tim O’Toole.

First Group’s results were dragged down by a £277 million impairment charge linked to its Greyhound bus service in the US.

Shares were down 21p at 89.8p.

Card Factory shares slumped 20.1p at 198.3p after reporting a 0.4% slide in sales, but said it was performing strongly in an otherwise tough retail environment.

The market update comes just months after the gifts retailer issued a profit warning in January.

Shares in chemicals specialist Johnson Matthey rose 116p to 3,513p despite being reporting a 27% drop in full-year operating profits.

The company was hit by a £90 million restructuring cost and a £50 million charge following a contract dispute in the US,  though sales grew 7% for the year to March 31.

The biggest risers on the FTSE 100 were Evraz up 27.9p at 510.8p, Johnson Matthey up 116p at 3,513p, CRH up 85p at 2,765p, and Informa up 16.2p at 784.4p.

The biggest fallers on the FTSE 100 were Taylor Wimpey down 11.05p at 190.15p, National Grid down 41.2p at 833.3p, Marks and Spencer Group down 13.5p at 284p, and NMC Health down 140p at 3,524p.


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