European shares slide as dispute ramps up

Published: July 11, 2018 16:11:57 | Updated: July 13, 2018 11:54:30

European shares slipped on Wednesday as an escalation in the US-China trade dispute looked set to bring a six-session winning streak to an end.

The pan-European STOXX 600 index was down 1.1 per cent by 0905 GMT, while Germany's export-heavy DAX fell 1.2 per cent, reports Reuters.

The Trump administration raised the stakes in the standoff with Beijing by threatening to impose 10 per cent tariffs on a list of $200 billion worth of Chinese imports, a move that hit risky assets globally.

Though investors have been looking positively toward the second-quarter earnings season, the increasingly uncompromising rhetoric on trade has weighed on equities recently.

All European sectors were in negative territory, with those most exposed to action on tariffs taking the most points off the STOXX. Basic resources was down 3.1 per cent and autos down 1.7 per cent.

With the earnings season about to get into gear, trading updates put individual stocks into focus.

Shares in Indivior plunged almost a third after the drugmaker said its 2018 profit would come in below its forecast, hurt by the launch of generic versions of its bestselling opioid addiction treatment in the United States.

Micro Focus was another large faller, down 7.5 per cent after the software company gave a half-year update, with analysts at Investec saying that they still see “material challenges ahead for the business”.

Micro Focus’ shares are down more than 52 per cent this year.

Shares in Burberry were down 3.7 per cent after the luxury retailer’s first quarter update failed to impress investors, with no outlook hike.

UK housebuilder Barratt Developments rose 1.4 per cent after the company said that it expected profits to have risen 9 per cent in 2018.

In M&A news, shares in UK broadcaster Sky retreated 0.8 per cent after Rupert Murdoch’s 21st Century Fox said it had agreed a $32.5 billion bid for Sky, trumping a rival offer from US group Comcast.

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