European shares slide at end of a miserable May

European stocks fell on Friday, with auto-makers hit especially hard, after US president Donald Trump widened the scope of his trade wars by threatening to impose new tariffs on Mexican imports.

Investors exited riskier equity positions and moved to safer ground, sending defensive stocks higher and yields on German bonds to record lows.

DUBLIN

The Iseq fell 0.8 per cent in line with the poor end to the week across Europe, as gains for some key stocks offset declines for Ryanair and CRH.

The building materials group, the largest stock on the market, dropped 1.6 per cent to finish the week at €27.99, while the airline lost more than 4 per cent to close at €10.01, after smaller budget airline Wizz Air echoed its remarks about "limited visibility" for the sector in the second half of 2019.

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Drinks group C&C lost the gains it made in Thursday's session, with the stock closing down 4.1 per cent at just below €3.65.

Kingspan rose almost 2 per cent to €46.66, while Bank of Ireland advanced more than 0.5 per cent to €4.80. Cairn Homes was another climber, adding 2 per cent to €1.22. Total Produce added 3.3 per cent to €139.50 after a short trading statement in which it said it was targeting continued growth for 2019.

LONDON

The FTSE 100 fell almost 1 per cent on Friday after the White House tariff threats, while disappointing manufacturing data from China stoked global downturn fears.

Financial stocks fell more than 1 per cent and mining stocks were off almost 2 per cent, while exporters such as British American Tobacco, Diageo and Unilever suffered as the dollar weakened. However, the macroeconomic uncertainty aided precious metals miner Fresnillo, which gained 2.8 per cent.

Wizz Air, the Geneva-based airline with a listing in London, closed down 2.3 per cent, having traded about 5 per cent lower earlier in the session.

The airline highlighted a “challenging operating environment”, but said it expected to gain market share as rivals battle with higher fuel prices and summer industrial disruption.

AIM-listed Stride Gaming surged 25 per cent after it agreed to a takeover by Rank Group, which said the deal would create the number two player in UK online bingo, lifting its own shares by 4.7 per cent.

EUROPE

The pan-Europe Stoxx 600 fell 0.8 per cent on the day to close out May with a 5.7 per cent slide, its worst monthly loss since January 2016.

In Germany, the exporter-heavy Dax fell 1.5 per cent to a five-month closing low, while the Spanish market was also hard hit, losing 1.7 per cent. The French Cac 40 was down 0.8 per cent.

Trump's move hit European stocks exposed to Mexico, including Madrid-listed banks Santander, Sabadell and Bilbao, which slid between 2.4 per cent and 4.1 per cent.

Carmakers and their suppliers shed 2 per cent, while Fiat Chrysler and Volkswagen – which import cars to the US from Mexican plants – shed 4.8 per cent and 2.6 per cent respectively.

Milan-listed stocks fell 0.7 per cent, after lenders were hit by the Bank of Italy warning that public debt could rise more than forecast this year.

US

Wall Street’s main indexes fell sharply on Friday, hit by fears that Trump’s shock threat of tariffs on Mexico could prove the trigger that pushes the US into recession.

Carmakers and manufacturers were among the worst hit. General Motors dropped 4.2 per cent and Ford Motor Company was down 2.9 per cent in early trading.

FAANG stocks – Facebook, Apple, Alphabet, Netflix and Amazon – declined between 0.8 per cent and 2.5 per cent.

Gap tumbled 11.1 per cent, the most among S&P 500 companies, after the clothing retailer cut its 2019 profit forecast. Constellation Brands, which has substantial brewery operations in Mexico, slid 6.6 per cent.

– Additional reporting: Reuters/Bloomberg