European shares slip as Turkey tariff move sours sentiment
LONDON (Reuters) – European shares slipped into negative territory on Wednesday after a doubling by Turkey of tariffs on some U.S. imports soured sentiment and weak commodity prices impacted miners.
Bearish Asian markets, a strengthening dollar and a surprise 2 percent fall in Chinese technology giant Tencent Holdings’ earnings (0700.HK) also weighed.
“In a market highly sensitive to downside sentiment, today’s Tencent result could prove a fresh catalyst for continued emerging market pressure,” said Douglas Morton from Northern Trust Capital Markets.
At 1330 GMT, the pan-European STOXX 600 was down 1 percent with most major bourses trading lower as Wall Street opened in the red.
Auto stocks were among the worst performers, pushing the DAX down to a six-week low after Turkey doubled tariffs on U.S. alcohol, car and tobacco imports.
The auto sector .SXAP was down 1.7 percent, near lows hit when trade war fears gripped markets at the start of July.
“The imposition of punitive tariffs on a raft of U.S. imports is hardly indicative of the Turkish authorities being ready to embark on some sensible monetary and fiscal measures to combat the crisis,” said Neil Wilson of markets.com.
Miners .SXPP were down 3.3 percent and at an eight-month low as renewed anxiety over trade piled pressure on a sector already dented by falling copper prices.
Corporate earnings triggered some share price moves: Danish wind turbine maker Vestas (VWS.CO) jumped 3.9 percent after reporting better-than-expected second-quarter operating profits and launching a 200 million-euro ($227 million) share buy-back.
Noting the “sharp margin beat along with stable pricing,” UBS analysts maintained their “buy” rating on the stock.
Also in Denmark, audio equipment maker (WDH.CO) William Demant fell 9 percent after it published a trading update that Bernstein analysts said lifted its guidance “perhaps less than consensus would have hoped for”.
In the UK, Admiral (ADML.L) rose to the top of the FTSE 100 .FTSE, gaining 3.6 percent, after posting a 9 percent rise in first-half pre-tax profit.
Hikma Pharma (HIK.L) posted the best performance by mid-sized listed firms, up 7.5 percent, after raising its outlook.
Atlantia (ATL.MI), which owns Autostrade per l’Italia, was down 5.4 percent after Italy’s transport minister called for senior managers of the company – which operated the bridge that collapsed in Genoa on Tuesday – to resign.
Shares in Air France-KLM (AIRF.PA) were up 0.9 percent after reports its board was likely to appoint Air Canada’s (AC.TO) chief operating officer, Benjamin Smith, as its new boss.
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