By Sukriti Gupta and Medha Singh
(Reuters) -European stocks dipped on Thursday as investors digested mixed corporate results, while investors remained wary amid a changing U.S. tone around its trade war with China.
The pan-European STOXX 600 index was down 0.7% as of 0804 GMT. Other regional indexes – Germany, France, Spain, and the UK – fell between 0.3% and 0.9%.
Global markets tumbled on U.S. President Donald Trump’s attacks on Federal Reserve Chair Jerome Powell last week, although he retracted calls for his resignation just days later.
The White House showing its willingness to de-escalate the trade war helped European stocks and Wall Street recover on Wednesday, while U.S. Treasury Secretary Scott Bessent said that high tariffs between the U.S. and China are not sustainable.
“We don’t hear much from China and it looks like the up and downs are mostly driven by whatever is said on the Trump’s side without necessarily having a solid founding. So the markets this morning are correcting to the downside after yesterday’s rebound on this fragile optimism,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
European luxury stocks led declines among sectors with an 1.8% fall, followed by technology companies that shed 1.4%.
The European benchmark has recovered over half of its losses from its near 18% drop from record highs earlier this month after Trump’s eye-watering U.S. import tariffs triggered fears of a global recession.
The European Central Bank cut its deposit rate by 25 basis points last week to aid a struggling economy, with markets now expecting at least two rate cuts by the year-end.
“The divergence in the inflation outlooks between the U.S. and Europe will allow the ECB to provide support to the European economy and along with the government spending we expect to see some improvement in sentiments later this year,” Ozkardeskaya added.
In corporate news, Adidas shares rose 1.8% after the German sportswear and apparel maker reported first-quarter sales and profit above expectations.
France’s BNP Paribas fell 3.1% after the euro zone’s biggest bank by assets reported first-quarter earnings in line with expectations.
Kering tumbled 5.8% after the luxury group reported a bigger-than-expected decline in first-quarter revenue.
Nokia plunged 9.7% after the Finnish telecom firm reported first-quarter profit well below market expectations and flagged a short-term disruption from U.S. tariffs.
The German Ifo index data showed a surprise improvement in business morale in Europe’s biggest economy for April, a day after dour PMI readings for the euro zone and Britain.
(Reporting by Sukriti Gupta and Medha Singh in Bengaluru; Editing by Varun H K and Sonia Cheema)
