Trade uncertainty keeps European shares depressed

Published: September 07, 2018 15:45:09 | Updated: September 10, 2018 10:20:53

A trader sits in front of the computer screens at his desk at the Frankfurt stock exchange, Germany, June 29, 2015. Reuters/Files

European shares remained stuck at five-month lows on Friday as uncertainty over global trade rippled through markets and investors dumped riskier sectors.

The pan-European STOXX 600 gave up timid early gains to stand 0.1 per cent down at 1003 GMT while the exporter-heavy German DAX .GDAXI declined by 0.3 per cent.

Europe’s benchmark was set to end the week with a 2.4 per cent loss, its worst weekly performance since the end of March, with investors’ appetite for risk dented by worries over an escalating trade dispute between the United States and China as well as weakness in emerging markets.

Shares in more cyclical sectors, such as financials, energy and miners, were shunned as markets remained on edge after the deadline passed for the public comment period on proposed US tariffs on an additional $200 billion of Chinese imports.

The exact timing of when such tariffs would take effect remains uncertain.

“Investors still have the emerging markets issue and the global trade concerns to contend with,” said David Madden, market analyst at CMC Markets UK, adding that he expects volatility to remain low ahead of the release of a closely watched US jobs report later in the day.

European autos .SXAP, which have been particularly sensitive to headlines on tariffs, were down 0.3 per cent.

Tech stocks .SX8P were also slightly lower. Chipmakers AMS (AMS.S) and Siltronic (WAFGn.DE) were down 0.9 per cent and 3.9 per cent respectively, continuing a decline seen among US peers overnight.

A drop of as much as 5.0 per cent in shares of International Consolidated Airlines (IAG)(ICAG.L) weighed on the travel and leisure sector .SXTP, which fell 0.7 per cent.

British Airways, owned by IAG, said it had suffered a data breach involving the theft of financial and personal data from potentially hundreds of thousands of customers.

“That credit card information has been accessed by the hackers arguably makes this an order of magnitude more serious than the high-profile data breach at Dixons Carphone in 2017,” said AJ Bell investment director Russ Mould.

In the 2017 Dixons breach, the affected customer records did not contain payment card or bank account details.

Among Friday’s gainers, shares in French telecoms operator Iliad (ILD.PA) led the way with a 5.0 per cent rise on speculation that the company could be delisted, Reuters reported.

Iliad declined to comment on the rumours.

Amer Sports (AMEAS.HE) advanced by 2.5 per cent after the Finnish sporting goods maker put its Mavic cycling business up for possible sale late on Wednesday.

The company added that it was reviewing options for its fitness equipment and sports watch businesses.

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