European stocks set to open lower as trade war escalates

This post was originally published on link to post

European markets opened lower Thursday despite a late rally in Wednesday afternoon trade, after CNBC revealed that the U.S. plans to delay auto tariffs on European imports by up to six months.

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European STOXX 600 fell 0.2% at the opening bell, bank stocks leading the losses with a 0.7% decline in the early minutes of trade. Basic resources got off to the strongest start, climbing 0.8%.

Despite early losses across European markets Wednesday, autos finished around 2% higher Wednesday after three sources told CNBC Wednesday the administration will delay the tariffs, causing shares in carmakers Porsche, BMW and Daimler to climb.

In Asia, shares were mixed in Thursday afternoon trade after the U.S. took aim at Huawei again, with President Donald Trump declaring a national emergency over threats against U.S. technology. The move, done via executive order, is expected to precede a ban on American firms dealing with the Chinese telecommunications company.

Mainland Chinese and Hong Kong shares recovered from an early slip to trade slightly higher in the afternoon, while stocks in Japan and South Korea finished in the red.

Stateside, investors will be monitoring a volatile market environment after stocks rose Wednesday following multiple sources telling CNBC of the delay to auto tariffs. This came after a market sell-off Monday as the trade war between the world’s largest economies gathered pace.

Trade tensions, however, continued to weigh on investor sentiment as Trump declared a national emergency over threats against American technology.

Back in Europe, Brexit-supporting rebels within British Prime Minister Theresa May’s Conservative Party said Wednesday they would vote down her European Union divorce deal, due to be put before parliament for a fourth time next month.

Meanwhile, the European Commission is working on its biggest regulatory push on banking since the 2008 financial crisis, which could curb Britain’s access following its departure from the bloc, Reuters reported.

In corporate news, Italian insurer Generali reported first-quarter net profit of 744 million euros ($833.8 million), a 28% rise, boosted by growing operating results and sales of businesses.

NN Group beat expectations with a 50% surge in first-quarter core profit at 468 million euros, fueled by improved performance in its Dutch life insurance business.

Travel agency Thomas Cook saw losses increase and said political uncertainty would impact its profits this summer, adding that it had received multiple bids for its airline unit after it was put up for sale. The company reported an underlying loss in earnings before interest and tax (EBIT) of £245 million ($314.6 million).