European shares close flat as investors weigh US tariff impact on earnings
Investors were eagerly awaiting the latest round of company outlooks, as these were the first quarterly reports issued since trade uncertainty overwhelmed markets.
The pan-European STOXX 600 index was last at 550.24 points, with the auto sector the hardest hit during the day.
Among European luxury carmakers, Porsche dropped 1.6% and Aston Martin slumped 10% after saying they were lifting prices on their cars exported to the US as a result of tariffs.
Germany's Mercedes-Benz also slid 3.4% after the carmaker estimated a nearly $420 million tariff impact.
Adidas also warned it may have to hike prices in the United States after reporting US tariffs would add around 200 million euros ($231 million) to costs in the second half. Shares of the sportswear brand plunged 11%.
Still, analysts broadly expect corporate health to improve after the US and EU reached an agreement to reduce tariffs to 15% on EU goods, averting a broader trade war.
'My personal surprise is that (European companies) are adapting very quickly to this new context,' said Alberto Matellan, general manager of MAPFRE's French asset management subsidiary La Financiere Responsable.
'Maybe tariffs are the trigger to be quicker in adapting to a global shift that was going to happen anyway.'
However, the levies were much higher than earlier this year, and duties on certain sectors such as beverages were still to be decided.
The deal also had market participants reassessing their bets on European stocks after a bumper rally earlier in the year. Wall Street's S&P 500 has posted the biggest gains for the year, outperforming the STOXX 600.
Meanwhile banks, which are less exposed to trade concerns, were up for a second day and hit their highest since early 2010.
Swiss bank UBS rose 1.1% after reporting its second-quarter profit more than doubled from last year, while HSBC Holdings fell 3.8% on posting first-half pretax profit below estimates.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
8 hours ago
- Express Tribune
Trump moves N-subs near Russia as tensions soar
US President Donald Trump speaks after signing the VA Home Loan Program Reform Act at the White House in Washington, DC, US, July 30, REUTERS US President Donald Trump on Friday said he had ordered two nuclear submarines to be positioned in regions near Russia in response to "threats" from former Russian president Dmitry Medvedev as Moscow remained firm on its Ukraine stance despite a looming sanctions deadline from Washington. Just days after Trump and Medvedev, who is deputy chairman of Russia's Security Council, traded taunts Russian President Vladimir Putin said that Moscow hoped for more peace talks with Ukraine but that the momentum of the war was in Russia's favour. Trump on Tuesday said Russia had "10 days" to agree to a ceasefire in Ukraine or be hit, along with its oil buyers, with tariffs. In response, Medvedev accused Trump of engaging in a "game of ultimatums" and reminded him that Russia possessed Soviet-era nuclear strike capabilities of last resort." "I have ordered two Nuclear Submarines to be positioned in the appropriate regions, just in case these foolish and inflammatory statements are more than just that," Trump said. "Words are very important, and can often lead to unintended consequences, I hope this will not be one of those instances." Trump has said he will impose new sanctions on Moscow and countries that buy its energy exports – of which the biggest are China and India – unless "Russia moves by August 8 to end the 3-1/2 year war". However, Moscow has shown no sign that it will comply with Trump's deadline. Putin, without referring to the Trump deadline, said three sessions of peace talks with Ukraine had yielded some positive results, and Russia was expecting negotiations to continue. "As for any disappointments on the part of anyone, all disappointments arise from inflated expectations," he said. "In order to approach the issue peacefully, it is necessary to conduct detailed conversations. And not in public, but this must be done calmly, in the quiet of the negotiation process," he said, adding that Russian troops were attacking Ukraine along entire front line and the momentum was in their favour. Putin was speaking alongside his ally Alexander Lukashenko, the president of Belarus, at talks on an island in Lake Ladoga that is the site of a famous Russian monastery. Russian TV earlier showed the two leaders greeting monks at the Valaam Monastery, and holding candles during the chanting of prayers. "I will repeat once again, we need a long and lasting peace on good foundations that would satisfy both Russia and Ukraine, and ensure the security of both countries," Putin said, adding that this was also a question of European security. The Ukrainian government has said the Russian negotiators do not have the mandate to take significant decisions and President Volodymyr Zelenskiy has called on Putin to meet him for talks. "We understand who makes the decisions in Russia and who must end this war," Zelenskiy said on X on Friday.
Business Recorder
9 hours ago
- Business Recorder
European shares log biggest daily drop after US tariffs hike
FRANKFURT: European stocks logged their biggest one-day drop in over three months on Friday, at the end of a busy week as investors grappled with the repercussions of fresh US levies on dozens of countries, including a 39% tariff on Switzerland. Investors shunned riskier equities globally as Trump continued his tariff blitz, announcing steep levies on exports from dozens of trading partners including Canada, Brazil, India and Taiwan with countries not listed subject to a base 10% rate ahead of a Friday trade deal deadline. Healthcare stocks lost 1% after US President Donald Trump sent letters to the leaders of 17 major pharmaceutical companies, including Novo Nordisk and Sanofi, outlining how they should slash US prescription drug prices. The sector was already singed this week by Novo Nordisk's profit warning. The Denmark-listed Wegovy-maker shed 1.8% and logged its steepest weekly decline on record. 'We saw during the week that companies like Novo Nordisk had different issues. European pharma is very close to bottoming and that's why it didn't react to the uncertainty around tariffs and policy,' Anthi Tsouvali, a multi-asset strategist at UBS Global Wealth Management said. 'Europe is an export market... if we see heightened tariffs all over the world and trade being subdued, then that will have an impact on European companies regardless.' The pan-European STOXX 600 index slid 1.9% and marked its biggest one-week drop since early April when Trump unveiled his tariffs on world economies. The euro STOXX volatility index jumped 4.25 points to its highest in over one-month. The STOXX index has lost over 5% from its March peak, after coming within 2% of that level earlier this week, dragged down by a record plunge in Novo Nordisk shares, and as investors assess the implications of the US-EU trade deal. Markets in Switzerland were shut for a holiday, but UK-listed Watches of Switzerland declined 6.8%, while a US-listed exchange traded fund tracking the country's equities slid to a more than three-month low and was last down 1.2%. Most regional bourses were in the red, with Germany's blue-chip DAX down 2.7%, while Denmark's OMXC fell 1.8% to a nearly two-year low. Banks, that had rallied earlier in the week, were down 3.4% and were the top sectoral underperformer as they notched their biggest one-day drop since early April.
Express Tribune
9 hours ago
- Express Tribune
McLaren's Norris leads Hungarian practice
Lando Norris lapped 0.019 of a second quicker than Formula One championship leader Oscar Piastri as the McLaren pair finished one-two in first practice for the Hungarian Grand Prix on Friday. Norris, 16 points behind his Australian teammate going into the last race before the August break, lapped the Hungaroring with a best time of one minute 16.052 seconds with the soft tyres on a sunny afternoon. The Briton was on pole at the circuit last year in a race won by Piastri, his first victory in F1. Ferrari's Charles Leclerc was third fastest, 0.217 off the pace, with Racing Bulls' French rookie Isack Hadjar in fourth. Lewis Hamilton, winner a record eight times in Hungary, was fifth for Ferrari and suffered a big lock-up as he wrestled with the car. Oliver Bearman was sixth for Haas, ahead of Mercedes pair Kimi Antonelli and George Russell with Red Bull's reigning champion Max Verstappen ninth and Lance Stroll completing the top 10 for Aston Martin. Russell complained about his car's balance and said it was hard to turn. Verstappen's Japanese teammate Yuki Tsunoda was only 17th. Brazilian Felipe Drugovich stood in for Fernando Alonso at Aston Martin, with the Spaniard suffering from back pain, and was 16th fastest. Estonian Paul Aron also took Nico Hulkenberg's Sauber for the session and was last after having to stop before the midpoint of the session due to a technical problem. McLaren's progress faster than Ferrari in Schumacher era: Stella McLaren's rate of progress may be faster than Ferrari during their golden era with German Formula One great Michael Schumacher, team boss Andrea Stella said on Friday. The Italian worked at Maranello with seven-times champion Schumacher as an engineer during that period but told reporters at the Hungarian Grand Prix that he had been surprised by McLaren's growth. The Woking-based team won the constructors's title last season and are running away with both championships this year with Piastri and Norris fighting for the drivers crown. McLaren have won 10 of 13 races so far and are a mighty 268 points clear of second second-placed Ferrari in the team standings. In 2023 they were fourth overall and in 2022 fifth. "It's always difficult to compare across seasons," said Stella, who joined McLaren from Ferrari in 2015. "In this case, we are comparing across teams, and even myself, I was in a very different role, so my field of view, my perspective was very different. "But if I had to pick a couple of features of the journey that is happening here at McLaren, I would say the rate of progress that we have had in a couple of years is in itself pretty unique. "And possibly the rate of progress itself was even faster than what we experienced at Ferrari in the very competitive times." Schumacher won five titles in a row between 2000-2004, with the last one a particularly dominant season and Ferrari winning 15 of 18 races. Stella said McLaren had set out an ambitious programme when deciding how much effort to put into developing their car this season, with a new engine era coming in 2026 that could shake up the pecking order.
