Europe close: Bourses finish in the red as trade fears mount
European bourses had a downbeat day on Thursday, with all the major equity indices finishing in the red as heightened tensions over trade weighed on markets and investors digested a slew of corporate news.
The benchmark Stoxx Europe 600 index closed 0.3% lower at 386.03, France's CAC 40 ended off 0.6% at 5,417.07 and Germany's DAX finished down 0.6% at 12,686.29.
European Union officials travel to the US next week to discuss trade talks with President Donald Trump, who has warned of “tremendous retribution” if they are unable to reach agreement on tariffs.
Earlier in the day, rumours surfaced that BMW was considering moving its US production to China, because of trade concerns, though the German car giant later denied the reports.
Connor Campbell, financial analyst at Spreadex, said: “Like the Dow Jones, the Eurozone indices were shaken by Trump’s latest trade war tantrum, spending Thursday all rouged up. The CAC dropped 0.6%, but managed to keep above 5400, while the DAX slipped around 80 points, dragging the German bourse back under 12,700 and away from Wednesday’s one-month highs.”
Brexit was also on traders’ minds, with new Brexit Secretary Dominic Raab meeting the EU’s chief negotiator Michel Barnier in Brussels.
Also hurting the Dax were miners, with the Stoxx 600 basic resources index closing down 1.6% at 456.97 as metals prices declined on the back of a stronger dollar.
In individual stocks, France's Publicis closed under the cosh after the media group posted an unexpected drop in second-quarter sales following a poor performance at its US healthcare communications business. It dragged London-listed peer WPP down with it.
Liberum said: "While operating margin was significantly ahead of expectations, the focus will be on the weaker revenue numbers, especially as Omnicom earlier this week also underperformed expectations." The brokerage said it expects sentiment to be weaker until there are signs of top-line momentum recovering in the second half.
IG analyst Chris Beauchamp said: "These big ad firms increasingly look like creatures from another age, having had the ground cut from underneath them by Facebook and Google."
German technology company SAP fell despite reporting better-than-expected second-quarter profits and lifting its full-year guidance.
Among those making gains, French transport group Alstom closed in the black after it reported a jump in first-quarter sales and orders.
And Anglo-Dutch consumer goods giant Unilever, which trades on Euronext Amsterdam and the London Stock Exchange, reversed earlier losses to close in positive territory. It said underlying sales growth slowed in the second quarter due to the impact of a truckers' strike in Brazil but it remained confident of hitting full-year targets.
Swiss industrial equipment maker ABB rallied as it posted better-than-expected second-quarter orders and Banco de Sabadell gained after agreeing to transfer real estate assets with a gross book value of around €9.10bn to Cerberus Capital Management.
French telecoms company Iliad was on the rise after saying it had reached 1 million subscribers in Italy and would extend its low-cost offer.
Ahead of a possible public listing later this year, Sweden's Volvo Cars said it was on track for another record year after second-quarter profits motored ahead. The manufacturer's Chinese owner Geely hired investment banks to prepare for a potential initial public offer for Volvo this year, Reuters reported recently, with an estimated potential market valuation of at least €14bn.