European shares slip amid jitters over tariffs and rates

European shares slipped on Thursday, with automakers falling on continued jitters over the EU’s new tariffs on imported Chinese electric vehicles, while Italian shares underperformed their continental peers. Investors also digested the Federal Reserve’s projection for fewer US rate cuts this year,

Dublin

The Iseq was unable to sustain two days of consecutive gains, sliding 1.35 per cent in line with negative investor sentiment across Europe, with Ryanair leading the market lower. The airline fell almost 2.7 per cent to €16.99 on a weak day for airline stocks.

Kingspan was another faller, with the building materials company declining 2.6 per cent to €85.35. The banks also dropped with AIB ending 1.1 per cent lower at €4.86 and Bank of Ireland slipping 1.1 per cent to €9.80.

Packaging group Smurfit Kappa was among the risers, adding 0.7 per cent to close at €42.32.

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London

British stocks closed lower on Thursday, tracking European market losses. The blue-chip FTSE 100 closed 0.6 per cent lower, a day after its best day in over a month. The mid-cap FTSE 250 dipped 1.5 per cent in its worst day in nearly two months.

Home construction and household goods slipped 2.8 per cent as Crest Nicholson slumped 11.6 per cent to the bottom of the FTSE 250 after the home-builder warned its annual profit would fall about one-third and posted an 88 per cent slump in half-year earnings.

Among other individual stocks Halma jumped 13.4 per cent to the top of the FTSE 100 after the technology firm beat estimates for full-year revenue and core profit.

Shares in fintech company Wise declined 11.5 per cent despite a tripling in profits for the past year after its profit forecasts disappointed investors.

Europe

The continent-wide Stoxx 600 closed 1.3 per cent lower, with auto stocks losing 2.4 per cent as investors fretted over how China might respond to the EU’s new tariffs on imported Chinese electric vehicles to combat what Brussels sees as excessive subsidies from Beijing.

Beijing slammed the tariffs as protectionist behaviour, and said it hoped the EU would correct its “wrong practices” and handle trade friction through dialogue.

Italy’s benchmark stock index lagged peers with a 2.2 per cent drop after Italian borrowing costs rose to their highest since November at an auction. France’s Cac 40 remained under pressure, falling almost 2 per cent, while European banks dropped 2.4 per cent.

Shares of Lufthansa slid 5.5 per cent as analysts at JP Morgan placed the German flagship airline on a negative catalyst watch.

US

The S&P 500 and the Dow indexes slipped as investors weighed hawkish Federal Reserve projections against data signalling cooling inflation, though strength in chip stocks supported the Nasdaq. A Labor Department report showed the US producer price index unexpectedly fell 0.2 per cent month-on-month in May, compared with a 0.1 per cent increase expected by economists polled by Reuters.

Nasdaq component Broadcom soared 12.2 per cent to hit a record high after the chipmaker raised its forecast for revenue from semiconductors used in artificial intelligence (AI) technology. It also announced a 10-for-1 forward stock split.

AI chip leader Nvidia rose 2.8 per cent, pushing the Philadelphia SE Semiconductor Index 1 per cent higher to an all-time peak.

Tesla rose 3.8 per cent after Elon Musk said company shareholders were voting to approve his $56 billion (€52bn) pay package and to move the electric vehicle maker’s legal home to Texas.

Apple was flat after overtaking Microsoft as the world’s most valuable company earlier in the week. Virgin Galactic plunged 14.7 per cent, a day after announcing a 1-for-20 reverse stock split.

Additional reporting: Reuters

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