European stocks fell across the board, led by car makers, as Donald Trump’s tariff threat on the United States’ largest trading partners prompted worries about another global trade war.
US president-elect Trump, who takes office on January 20th, plans to impose a 25 per cent tariff on imports from Canada and Mexico and slap “an additional 10 per cent tariff, above any additional tariffs” on China, hurting the positive market sentiment following the nomination of Scott Bessent as US Treasury secretary. The dollar rose, while global equity markets declined.
“We’ve seen this movie before and it’s going be negotiating tool, however we can’t dismiss it entirely because this time Trump has full support of both the houses” of the US Congress, said Chris Beauchamp, chief market analyst at IG Group.
“Investors have learned something from before and jumping like a frightened cat at every Trump headline is not going to be the way to get through this.”
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Dublin
Home builder Glenveagh was up 1.5 per cent, even as rival Cairn Homes fell 0.5 per cent. Bank of Ireland and AIB meanwhile traded up 0.7 per cent in a relatively positive session for financials. However Ryanair traded down 1.2 per cent to close at €18.35 despite a big Black Friday sale to various European destinations.
Europe
The pan-European Stoxx 600 was down 0.5 per cent, snapping a three-day winning streak, with concerns over tariffs re-stoking global inflation and weighing on monetary-policy easing also dampening investors’ mood.
China-exposed stocks were the most affected on the index.
The auto sector, expected to be among the worst hit under Trump tariffs, was down 1.6 per cent, with Stellantis – the owner of Fiat and Peugeot, and Volkswagen among the top losers, shedding 4.8 per cent and 2.4 per cent, respectively. BMW meanwhile dropped 1.2 per cent, while Mercedes-Benz fell about 1 per cent.
Retail and miners were some of the other badly hit sectors, down 1 per cent and 1.9 per cent respectively, with the latter taking a hit on weak metal prices.
“European carmakers have seen clear weakness in their sales over the past few years and they have also been in the crossfire with the Chinese trade tensions ... They are no longer in a position to afford additional tariffs,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
London
The FTSE 100 retreated on Tuesday, ending its three-day run of gains. London’s blue-chip index fell 33.07 points, or 0.40 per cent, to end the day at 8,258.61.
In company news, retailer Halfords signalled it may look to raise repair garage prices as it warned that UK Budget measures will send its wage bill soaring by around £23 million.
The firm said the cost implications of next April’s rise in national insurance contributions (NICs) and the minimum wage increase were “particularly acute” given its workforce of more than 12,000, while it also said the impact of Budget moves on consumers was “unclear”.
The company said only around £9 million of the extra cost burden was already included in its plans for 2025-26 and mitigated.
New York
The benchmark S&P 500 and the Nasdaq extended recent gains in early trading on Tuesday, as technology stocks rebounded, while US investors parsed Donald Trump’s tariff pledges on top trade partners and awaited minutes from the Federal Reserve’s latest meeting.
By 1.45pm in New York the S&P 500 was up 0.4 per cent.
Automakers such as Ford and General Motors which have highly integrated supply chains across Mexico, the US and Canada – lost 2.1 per cent and 7.2 per cent, respectively. Gains in megacaps such as Nvidia, Microsoft and Apple boosted the information technology sector and the tech-heavy Nasdaq. The blue-chip Dow Jones Index was weighed down by declines in Amgen, which slid 11 per cent after its experimental obesity drug fell short of expectations. – Additional reporting Reuters
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