European shares retreated from record highs on Thursday, with automakers leading declines as investors evaluated the impact of US president Donald Trump’s potential tariffs on the European Union.
The pan-European Stoxx 600 index closed down 0.5 per cent, after touching a record high on Wednesday.
An index of European autos and component makers fell more than 3.7 per cent. Stellantis dropped 5.2 per cent, BMW lost 3.8 per cent and Porsche was down 3.3 per cent.
Ferrari was the biggest drag, down 7.9 per cent, after Exor sold a roughly 4 per cent stake in the luxury automaker for €3 billion.
The European Commission said that it would react “firmly and immediately against unjustified barriers to free and fair trade”, in response to Mr Trump’s tariffs.
Dublin
After suffering a colossal 23 per cent nosedive on Wednesday linked to a negative earnings forecast, Glanbia shares fell by a further 3.6 per cent on Thursday to close at €10.80. The sell-off came on the back of a weaker earnings outlook connected to the higher cost of whey, a key input in the group’s protein powder products.
Cairn Homes traded flat at €2.13 after the company announced positive results for last year, including a 29 per cent bounce in headline revenue. “We took a material step, right across our business, in operational performance and volume delivery in 2024,” chief executive Michael Stanley said. Bank of Ireland was up 1.4 per cent while AIB was down 0.4 per cent.
London
London’s FTSE 100 outperformed European peers with modest gains on Thursday as a boost for Rolls-Royce helped offset heavy losses for WPP. The blue-chip index climbed 24.75 points, or 0.28 per cent, to close at 8,731.46.
Shares in Rolls-Royce soared by more than 15 per cent after the engine manufacturer lifted its profit forecast and said it would buy back about £1 billion of stock from investors.
New plans to hike defence spending in the UK have driven stronger investor sentiment for manufacturers in the sector in recent weeks. The chief executive of Rolls-Royce, which makes engines for passenger jets and the military, said higher levels of spending would bring more jobs and grow the economy.
Chris Beauchamp, chief market analyst for IG, said: “Rolls-Royce’s astonishing gains have been a major theme for investors for around two years, but today saw the stock hit stratospheric levels after a resoundingly bullish set of figures.”
Europe
European stocks were weaker across the board, with the Stoxx 600 index dragged by automaker and component maker shares in response to the potential US tariffs. The technology index was also down.
“We’re almost in a situation where there is so much news that it’s leaving traders paralysed, because they don’t know what to focus on, and particularly with Trump, what is a negotiating gambit and what is a serious policy proposal,” said Michael Brown, senior research strategist at Pepperstone.
“Given the degree of uncertainty, it does make sense to lighten up on positioning, particularly in riskier assets.”
Most Stoxx 600 sectors closed lower but energy shares were a bright spot, buoyed by rising oil prices.
Meanwhile, the European Central Bank’s system that handles $1.9 trillion a day in transactions across the region was suffering an outage which could delay settlement of payments.
New York
Wall Street’s main indexes were mixed on Thursday as Nvidia shares swung to losses after investors refocused on signs of increased AI spending in the industry, and data pointed to a cooling US economy.
Nvidia was down 3.5 per cent – a contrast to outsized gains booked following some of its earlier results announcements. The company forecast upbeat quarterly revenue but its first-quarter gross margin outlook was below expectations.
Fellow chipmakers Broadcom and Advanced Micro Devices also fell, driving the broader chip index down 2.2 per cent. Alphabet and Microsoft, among Nvidia’s biggest customers, slipped 1 per cent and 0.3 per cent.
The launch of low-cost AI models from China’s DeepSeek in January had cooled a two-year bull run on Wall Street, with Nvidia losing half a trillion dollars in market value in a single day. More recently, an analyst report suggesting Microsoft was scrapping some data centre leases also raised concerns of overcapacity. – Additional reporting by Reuters
