European Stocks Fall for Third Session as Tariff Fears Rise
European stocks fell for a third straight session on Friday, extending losses as investors weighed the potential consequences of a widening trade war.
The Stoxx Europe 600 Index was down 0.2% at 8:39 a.m. in London, heading for its third week of losses in the past four. Sectors considered bond proxies, such as real estate and utilities, outperformed as German bonds held onto gains after inflation in France and Spain came in below expectations, supporting calls for more interest-rate cuts by the European Central Bank. Banks and industrials were among the worst performers.
Investors have shown lower risk appetite after Donald Trump announced a 25% tariff on car imports this week. The U.S. president is expected to announce a series of further measures on April 2. “The auto tariffs have made investors realize that, while they may not be as broad, the tariff action on April 2 may be bigger than previously thought,” said Norman Villamin, group chief strategist at Union Bancaire Privée. Among individual movers, Ubisoft Entertainment jumped as much as 11% after the video game maker said it would spin itself off, with Tencent Holdings Ltd. investing 1.16 billion euros for a stake in it.
Sportswear makers Adidas AG and Puma SE fell as much as 1.6% and 2.5%, respectively, after the outlook for rival Lululemon Athletica Inc. raised concerns about consumer spending. Still, European stocks were headed for their best quarterly performance against the U.S. on record as tariff concerns were offset by Germany’s fiscal spending plans, lower interest rates in the euro zone and cheaper, more attractive valuations. The DAX also rallied, and is on track for its best first quarter in a decade.
Source: Bloomberg
