European shares dip as Trump reignites trade war fears

European shares fell on Tuesday after a new threat by Washington to impose more tariffs on Chinese products and fears the trade war could spread to Europe after a report in Germany of possible new US taxes on imported cars.

The pan-European STOXX 600 benchmark closed down 0.2 per cent, pulling back from the one-week high reached the day before on optimism over Brexit and a possible Italian budget compromise with Brussels.

Dublin

The Dublin market closed down lower on Tuesday, with Ryanair among the biggest fallers. The airline ended the day down 3.5 per cent to €11.80 as investors considered a recent downgrade.

Banks were in focus with the Central Bank due to issue its latest report on mortgage limit rules. Bank of Ireland was down 0.6 per cent to €5.80, AIB was up 0.3 per cent to €3.83 and Permanent TSB was 1.3 per cent lower at €1.68.

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Dalata, which has had a few off days of late, was down again, slipping 1 per cent to €4.68. Kingspan, which has also been weak recently, was down 3.6 per cent to €39.

London

A plunge in tour operator Thomas Cook weighed on British stocks on Tuesday, as miners also tumbled with metals prices dented by fears of a further escalation in US/China trade tensions.

The FTSE 100 opened higher but gains quickly evaporated, leaving the index down 0.3 per cent at the close. The mid-cap FTSE 250 index was down 0.3 per cent.

Thomas Cook Group plunged as much as 31 per cent after it suspended its 2018 dividend and cut its profit forecast for the second time in two months, saying an exceptionally hot summer had deterred Britons from holidaying abroad. The stock closed down 22.6 per cent at 33.92 pence, its weakest in nearly six years and also dragged rival Tui down 2.5 per cent.

In other big results-driven moves, Greggs shares surged as much as 16 per cent to a fresh record high after the bakery and food-to-go chain reported strong sales in October and November and said it expected higher 2018 profits.

UDG Healthcare shares fell 3.9 per cent after the mid-cap healthcare facilities company said 2019 growth would be impacted by planned investments.

Europe

Accor, rose 1.8 per cent on Tuesday after Europe's largest hotels company stuck to its target of doubling core earnings to €1.2 billion by 2022.

Tele2 rallied for a second day, up 11.5 per cent, following a Reuters report that the European Commission was set to approve without conditions the sale of its Dutch business to Deutsche Telekom. Following the report, which has rekindled expectations of more dealmaking in the sector, Tele2 said it was optimistic the EU would approve the planned merger.

Shares in Osram rose 16.3 per cent after Bloomberg reported that private equity firm Bain Capital was exploring a takeover bid for the German lighting group, citing people with knowledge of the matter.

Wall Street

US stocks declined on Tuesday after President Donald Trump's threat to move ahead with additional tariffs on Chinese goods dampened hopes of resolving the trade spat at the upcoming G20 Summit.

Apple fell 1.6 per cent and led the declines in the technology sector after Mr Trump said tariffs could also be placed on laptops and iPhones imported from China. Chipmakers, which have the highest revenue exposure to China among S&P 500 companies, also declined, with the Philadelphia SE Semiconductor index losing 0.79 per cent.

Shares of Boeing, the single largest US exporter to China, fell 1.2 per cent and fellow Dow component Caterpillar lost 1.6 per cent, weighing on industrial stocks.

– Additional reporting: Reuters