European shares suffer worst week since March on trade woes

[LONDON] European shares steadied on Friday but suffered their worst week since end March as uncertainty over global trade rippled through markets and investors dumped riskier sectors.

The pan-European Stoxx 600 benchmark was 0.08 per cent higher at the close, recovering from a fresh five-month low hit earlier in the session, while the exporter-heavy German DAX index also ended little changed.

The Stoxx ended off earlier lows after White House Economic Adviser Larry Kudlow told CNBC that the United States continued to talk with China about a number of trade issues but added that so far China has not met US requests.

The Stoxx however fell 2.2 per cent on the week, its worst performance since the end of March, with investors' appetite for risk dented by worries the trade dispute between the US and China could escalate as well as weakness in emerging markets.

"Equity investors have returned from their holidays to find the headlines still dominated by trade war fears, and are understandably in no great rush to commit cash to equities with index benchmarks in a clear short-term downtrend," said Peel Hunt strategist Ian Williams.

Shares in more cyclical sectors, such as financials, energy and miners, were shunned this week as markets remained on edge after the deadline to comment on proposed US tariffs on an additional $200 billion of Chinese imports passed.

Basic materials and banks were the worst sectoral performers, both ending down around one per cent.

European autos, which have been particularly sensitive to headlines on tariffs, hit a fresh 33-month low on Friday before recovering some ground and end up 0.2 per cent.

A 1.3 per cent fall in shares of International Consolidated Airlines (IAG) weighed on the travel and leisure sector, which fell 0.3 per cent.

British Airways, owned by IAG, said it had suffered a data breach involving the theft of financial and personal data from potentially hundreds of thousands of customers.

"That credit card information has been accessed by the hackers arguably makes this an order of magnitude more serious than the high-profile data breach at Dixons Carphone in 2017," said AJ Bell investment director Russ Mould.

In the 2017 Dixons breach, the affected customer records did not contain payment card or bank account details.

Among Friday's gainers, shares in French telecoms operator Iliad rose 2.3 per cent rise on speculation that the company could be delisted.

Iliad declined to comment on the rumours.

Amer Sports advanced 3.4 per cent after the Finnish sporting goods maker put its Mavic cycling business up for possible sale late on Wednesday.

The company added that it was reviewing options for its fitness equipment and sports watch businesses.

REUTERS