Europe: Shares end at record high; steelmakers, miners drop on tariff woes
EUROPEAN shares closed a choppy Tuesday session at a record high, as investors weighed the European Union’s response to US President Donald Trump’s tariff hike on all steel and aluminium imports that sparked a decline in basic resources stocks.
The pan-European Stoxx 600 index rose 0.23 per cent to 547.18 points, with banking stocks leading sectoral gains with a 1.4 per cent rise.
Basic resources fell 1.9 per cent, tracking a drop in base metal prices after Trump imposed tariffs on all steel and aluminium imports that will take effect from next month and is also expected to announce reciprocal tariffs on all countries that impose duties on US goods this week.
Shares in European steelmakers, which account for about 15 per cent of US imports, fell. ArcelorMittal and Voestalpine stocks dropped 1.9 per cent and 0.9 per cent, respectively, while Thyssenkrupp fell 3.9 per cent.
European Commission President Ursula von der Leyen condemned the Trump administration’s move and said that the 27-nation bloc would take “firm and proportionate countermeasures”.
“Markets are just waiting to see exactly how the European Union will respond and we’ve seen in the past with, of course, Canada and Mexico - the fact that tariffs are announced doesn’t necessarily mean they’re gonna be implemented in full or implemented when he says they will be,” said Daniela Hathorn, senior market analyst at Capital.com.
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Meanwhile, travel and leisure was the top sectoral laggard, down 2.3 per cent, dragged by an 11 per cent drop in Entain after the British bookmaker said CEO Gavin Isaacs would step down immediately.
TUI fell 10.8 per cent after Europe’s largest travel operator said its bookings growth weakened, sending shares of rival airlines such as Lufthansa, easyJet and Wizz Air down between 1.2 per cent and 3.9 per cent.
The Stoxx luxury index rose 1.1 per cent, with Kering up 1.3 per cent after the French luxury group reported fourth-quarter revenue above expectations.
Despite an uncertain global trade backdrop, the benchmark Stoxx index has logged gains of about 7.8 per cent so far this year as analysts expect Trump’s moves to be negotiating tactics and as investors focus on corporate earnings.
Among others, Vaar Energi shares rose 6 per cent after the oil and gas exploration and production company raised its dividend and posted fourth-quarter operating profit in line with expectations.
Swiss testing and certification company SGS jumped 6.7 per cent after it reported slightly better-than-expected profit.
EssilorLuxottica rose 1.7 per cent after Jefferies upgraded the Franco-Italian eyewear maker to “buy” from “hold”.
Kemira fell 8.1 per cent after the Finnish chemical solutions maker missed fourth-quarter profit forecasts.
Focus was also on comments from US Federal Reserve Chair Jerome Powell who said the central bank was in no rush to cut its short-term interest rate again. REUTERS
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