European stocks stall as auto tariff worries weigh
A bidding war for stock exchange operator Euronext and gains in defensive stocks propped up European markets on Monday, although doubts on whether or not the United States will impose tariffs on EU carmakers weighed on shares.
Europe’s benchmark STOXX index was up just 0.1%, as the spillover from upbeat trading in Asian hours wore off. Trade-sensitive shares in Germany and France were down 0.1% and 0.2%, respectively.
The auto industry sub-index fell 0.8%.
“For European markets, the fact that Trump still hasn’t made a decision in relation to tariffs is kind of hanging over,” said David Madden, market analyst at CMC Markets in London.
“People don’t want to buy up the DAX or the CAC aggressively while that decision hasn’t been made yet.”
Reports last week that U.S. President Donald Trump will delay a decision on the EU auto tariffs for another 180 days, along with better-than-expected corporate results and optimism about U.S. trade talks with China had sent European shares back near a 4-year peak.
European shares started on a positive note on Monday after Chinese state media Xinhua reported over the weekend that Beijing and Washington had “constructive talks” on trade in a high-level phone call on Saturday.
China’s central bank also unexpectedly trimmed a closely watched lending rate for the first time in more than four years on Monday, a signal that policymakers are ready to act to prop up slowing growth.
The top gainer on the STOXX 600 was Spanish bourse BME, which soared 36.6% to a four-year high after pan-European stock market operator Euronext and Switzerland’s SIX entered a bidding war for the operator.
Europe’s financial services index jumped 0.8%, but defensive real estate and healthcare sectors — considered as safer bets at times of economic uncertainty — led gains among the major European subsectors.
Among other individual movers, Frankfurt-listed shares of genetic testing company Qiagen NV jumped 12.1% after the company said it had started reviewing options including a sale.
London’s internationally exposed FTSE 100 was hurt by a stronger pound after polls showed British Prime Minister Boris Johnson’s Conservatives had a 14 point lead over the opposition Labour Party ahead of a Dec. 12 election.
The domestically focused mid-cap index, which tends to rise with sterling, gained 0.4%.
British life and general insurer Aviva Plc was the top decliner on the STOXX 600 after the firm said it was looking at strategic options for its operations in Vietnam, Indonesia and Hong Kong.
(Content and Photos syndicated via Reuters)