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Trade uncertainty keeps European shares depressed

Published 09/07/2018, 05:33 AM
© Reuters. A trader sits in front of the computer screens at his desk at the Frankfurt stock exchange
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By Kit Rees

LONDON (Reuters) - European shares remained stuck at five-month lows on Friday as uncertainty over global trade rippled through markets and investors dumped riskier sectors.

The pan-European STOXX 600 (STOXX) gave up timid early gains to stand 0.1 percent down at 1003 GMT while the exporter-heavy German DAX (GDAXI) declined by 0.3 percent.

Europe's benchmark was set to end the week with a 2.4 percent loss, its worst weekly performance since the end of March, with investors' appetite for risk dented by worries over an escalating trade dispute between the United States and China as well as weakness in emerging markets.

Shares in more cyclical sectors, such as financials, energy and miners, were shunned as markets remained on edge after the deadline passed for the public comment period on proposed U.S. tariffs on an additional $200 billion of Chinese imports.

The exact timing of when such tariffs would take effect remains uncertain.

"Investors still have the emerging markets issue and the global trade concerns to contend with," said David Madden, market analyst at CMC Markets UK, adding that he expects volatility to remain low ahead of the release of a closely watched U.S. jobs report later in the day.

European autos (SXAP), which have been particularly sensitive to headlines on tariffs, were down 0.3 percent.

Tech stocks (SX8P) were also slightly lower. Chipmakers AMS (S:AMS) and Siltronic (DE:WAFGn) were down 0.9 percent and 3.9 percent respectively, continuing a decline seen among U.S. peers overnight.

A drop of as much as 5 percent in shares of International Consolidated Airlines (IAG) (L:ICAG) weighed on the travel and leisure sector (SXTP), which fell 0.7 percent.

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 (LON:DC) 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 (PA:ILD) led the way with a 5 percent rise on speculation that the company could be delisted.

Iliad declined to comment on the rumors.

Amer Sports (HE:AMEAS) advanced by 2.5 percent after the Finnish sporting goods maker put its Mavic cycling business up for possible sale late on Wednesday.

© Reuters. A trader sits in front of the computer screens at his desk at the Frankfurt stock exchange

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

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