By Nikhil Sharma
(Reuters) – European shares extended declines on Friday, as market sentiment was dented after U.S. President Donald Trump said his proposed tariffs on Mexican and Canadian goods would take effect next week.
The pan-European STOXX 600 index was down 0.4%, as of 0930 GMT. Losses were led by basic resources which slid 1.3%, as Trump’s imminent tariff plans pressured metal prices. [MET/L]
Trump also vowed a fresh 10% duty on Chinese imports on top of the already existing 10% tariff levied on February 4.
Technology stocks lost 1.2%, following a sell-off in AI darling Nvidia overnight after its earnings report failed to impress investors.
Chip equipment makers ASML and ASM International fell 3.4% each.
China-exposed luxury stocks LVMH, Christian Dior and Kering slipped between 1% and 2%. The region-wide European luxury index shed 0.7%.
“There was a hope over the past month that Trump’s tariffs were just threats and they wouldn’t go forward… Today we see there is this fear that they could actually become reality,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
“The second thing is 25% levies on the European Union imports. So this is new. The number was not there before…and the new numbers just didn’t really please,” Ozkardeskaya said.
Trump on Wednesday floated a 25% tariff on cars and other goods from the European Union.
The worries over the escalating global trade war erased the STOXX 600 index’s initial weekly gains, which were powered by robust corporate earnings and prospects of higher defence spending in the region. The index is little changed for the week but is headed for a second straight monthly gain.
The European aerospace and defence index was a bright spot, up 8% for the week, fuelled by German arms makers following conservatives’ win in the national election on Sunday.
Valeo fell 13.1% after the car parts supplier reported annual results. CEO Christophe Perillat said he saw a marginal impact on earnings from U.S. tariffs on steel and aluminium.
Building materials company Holcim gained 3% after reporting better-than-expected quarterly earnings.
Italian payments group Nexi jumped 9.7% after it posted a 7% year-on-year rise in 2024 core profit to 1.86 billion euros ($1.93 billion), in line with a company-provided consensus.
The U.S. personal consumption expenditures (PCE) data – the Federal Reserve’s preferred inflation measure – will be closely watched later on Friday for cues on monetary policy trajectory.
(Reporting by Nikhil Sharma; Editing by Rashmi Aich and Eileen Soreng)
