European Stocks Fall First Day in Five on Tariffs, Virus Scare


European stocks ended a four-day winning streak as new U.S. tariffs aimed at goods from Germany and France raised fears of a worsening trade relationship and virus statistics showed a worsening situation in Europe’s core markets.

The Stoxx Europe 600 Index retreated 0.6% by the close in London. Even better-than-expected U.S. jobless claims data failed to boost equities today. Cyclical, or more economically sensitive industries including miners and banks were among the biggest decliners.

New U.S. tariffs on a selection of French and German goods drew calls for possible retaliation from France’s trade minister and signaled that the trans-Atlantic dispute over state aid to aircraft manufacturers is alive and well. Meanwhile, both countries are grappling with resurgent virus cases, with German cases rising the most in three months and France debating tougher containment measures.

Earlier this week, equities in the region had regained some lost ground since slumping from a post-crisis high reached in mid-July. The latest rebound was led by cyclical stocks including travel, banks, energy and automotive industries.

European Stocks Fall First Day in Five on Tariffs, Virus Scare

Some volatility was to be expected as the market digested a busy day of company earnings, amid a summer-lull week on equity markets characterized by low volumes, according to Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany. Market sentiment in recent weeks has turned positive, boosting the year’s worst-hit sectors as investors see catchup potential, he told Bloomberg in a phone interview.

Steelmaker Thyssenkrupp AG was the region’s worst performer with a 16% slump after warning of a widening operating loss. Life insurer Aegon NV and renewables firm Nordex SE also slid after both reported first-half results below expectations.

Near the end of Wednesday’s session, the Stoxx 600 Index briefly crossed its 200-day moving average for the first time in a month, before falling below it again on Thursday.

©2020 Bloomberg L.P.

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