European stocks fell for a fourth straight session as the threat of a fresh wave of U.S. tariffs hit stocks most exposed to trade tensions.
The Stoxx Europe 600 Index was down 1.7 per cent by 11:19 a.m. London time, with mining, auto and travel shares among the worst performers.
In individual stocks, Associated British Foods Plc shares fell as much as 5.1 per cent after the chief executive officer of its Primark fashion chain resigned. Fortnox AB shares rose 34 per cent after a consortium including funds managed by EQT AB offered to take the Swedish financial services firm private in a deal valued at 44.5 billion kronor (US$4.5 billion).
U.S. President Donald Trump said he plans to start his reciprocal tariff push with “all countries” ahead of the unveiling of levies on April 2, putting a dent into a strong quarter for European shares.
“In the current political landscape the threat of tariffs is never far away,” said Thomas Watts, senior investment analyst at Aberdeen MPS. “The latest announcement of a 25 per cent tariff on all imported cars into the U.S. is only the latest measure in a burgeoning trade war that could have a significant effect on Europe’s largest companies.”
Societe Generale SA strategists say that the uncertainty caused by tariffs has a greater impact on growth, and especially on investment decisions. They favor defensive sectors over cyclicals that have high growth expectations embedded into their valuations.
The Stoxx Europe 600 outpaced the S&P 500 by nearly 17 per cent percentage points this quarter in dollar terms — a record outperformance - as a wave of optimism around fiscal and defense spending in Germany gave the region a boost.
Aberdeen’s Watts said Europe has relative political stability and decreasing borrowing costs, which could benefit domestically-exposed companies such as European small caps.
Meanwhile, Citigroup Inc. strategists led by Mihir Tirodkar and Beata Manthey said they see plenty of room for further fund flows into European stocks even after recent inflows as sentiment on the region’s equities improves.
With assistance from Michael Msika.
Kit Rees, Bloomberg News
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U.S. President Donald Trump’s reciprocal tariffs on trading partners are set to take effect on April 2, a day he has proclaimed as “Liberation Day” for American trade. CTV News will have extensive coverage across all platforms:
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