European shares tumble as economic, trade uncertainty muddies growth outlook
European shares dropped on Tuesday, weighed down by economically-sensitive bank and mining stocks as investors awaited updates on the trade war clouding global growth.
The pan-European STOXX 600 reversed early gains to fall 0.5% by 0830 GMT, extending Monday's losses, as banks dropped 1.4% and miners slumped 2.3%.
The Paris-based Organisation for Economic Cooperation (OECD) and Development trimmed its global growth outlook and said the trade war was taking a bigger toll on the U.S. economy than before.
'The OECD forecasts is going to cause a great deal of concern…. a lot of people were thinking maybe inflation is behind us, but big concern now is about what happens next,' said Danni Hewson, head of financial analysis at AJ Bell.
The news comes ahead of a flash estimate of euro zone inflation numbers and the European Central Bank's monetary policy meeting this week.
Anxiety over how U.S. President Donald Trump's tariffs would be implemented after they ran into legal hurdles last week still prevailed after the administration asked an appeals court to pause a second court ruling.
European shares pressured by Trump's new tariff threats
However, the administration pushed countries for their best trade offers by Wednesday and said that Trump and his Chinese counterpart will likely speak this week amid escalating trade tensions, a sign that trade negotiations were on the horizon.
'Markets feel like they're on the Trump tariff roller coaster at the moment…. The biggest problem is that it always feels like it's one step forward, 2 steps back,' said Hewson.
Defensive stocks were in a bright spot with utilities and telecom advancing.
Meanwhile, Dutch far right leader Geert Wilders said his PVV party would leave the governing coalition, toppling the rightwing government and likely leading to new elections.
Stocks in Netherlands were down 0.6%, largely in-line with declines in regional bourses.
Among individual names, British water utility Pennon Group fell 2.1% after it swung to an annual pretax loss.
UBS gained 2% after Jefferies upgraded the bank's stock to 'buy' from 'hold'.
Julius Baer slipped 1.9%. The Swiss bank announced further cost-saving measures amounting to 130 million Swiss franc ($159.02 million) by 2028.
Real estate investment trust Cofinimmo gained 2.9% after announcing a merger with healthcare real estate firm Aedifica.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Iran weighs retaliation against U.S. for strikes on nuclear sites
ISTANBUL/WASHINGTON/OCCUPIED JERUSALEM: Iran and Israel traded air and missile strikes as the world braced on Monday for Tehran's response to the U.S. attack on its nuclear sites and U.S. President Donald Trump raised the idea of regime change in the Islamic republic. Iran vowed to defend itself on Sunday, a day after the U.S. joined Israel in the biggest Western military action against the country since its 1979 Islamic Revolution, despite calls for restraint and a return to diplomacy from around the world. ommercial satellite imagery indicated the U.S. attack on Saturday on Iran's subterranean Fordow nuclear plant severely damaged or destroyed the deeply buried site and the uranium-enriching centrifuges it housed, but the status of the site remained unconfirmed, experts said. Investors brace for oil price spike, rush to havens after US bombs Iran nuclear sites In his latest social media comments on the U.S. strikes, Trump said 'Monumental Damage was done to all Nuclear sites in Iran.' 'The biggest damage took place far below ground level. Bullseye!!!' he wrote on his Truth Social platform. Trump earlier called on Iran to forgo any retaliation and said the government 'must now make peace' or 'future attacks would be far greater and a lot easier.' The U.S. launched 75 precision-guided munitions including bunker-buster bombs and more than two dozen Tomahawk missiles against three Iranian nuclear sites, chairman of the Joint Chiefs of Staff, General Dan Caine, told reporters. The U.N. nuclear watchdog, the International Atomic Energy Agency, said no increases in off-site radiation levels had been reported after the U.S. strikes. Rafael Grossi, the agency's director general, told CNN that it was not yet possible to assess the damage done underground. A senior Iranian source told Reuters that most of the highly enriched uranium at Fordow had been moved elsewhere before the attack. Reuters could not immediately corroborate the claim. Tehran, which denies its nuclear programme is for anything other than peaceful purposes, sent a volley of missiles at Israel in the aftermath of the U.S. attack, wounding scores of people and destroying buildings in Tel Aviv. But it had not acted on its main threats of retaliation, to target U.S. bases or choke off oil shipments that pass through the Strait of Hormuz. Attempting to strangle Gulf oil supply by closing the strait could send global oil prices skyrocketing, derail the world economy and invite conflict with the U.S. Navy's massive Fifth Fleet based in the Gulf. Oil prices jumped on Monday to their highest since January. Brent crude futures LCOc1 rose $1.88 or 2.44% at $78.89 a barrel as of 1122 GMT. U.S. West Texas Intermediate crude CLc1 advanced $1.87 or 2.53% at $75.71. Iran's parliament has approved a move to close the strait, which Iran shares with Oman and the United Arab Emirates. Iran's Press TV said closing the strait would require approval from the Supreme National Security Council, a body led by an appointee of Iran's Supreme Leader Ayatollah Ali Khamenei. Trump says Iran's key nuclear sites 'obliterated' by US airstrikes Caine said the U.S. military had increased protection of troops in the region, including in Iraq and Syria. The U.S. State Department issued a security alert for all U.S. citizens abroad, calling on them to 'exercise increased caution.' The United States already has a sizeable force in the Middle East, with nearly 40,000 troops and warships that can shoot down enemy missiles. The Israeli military reported a missile launch from Iran in the early hours of Monday morning, saying it was intercepted by Israeli defences. Air raid sirens blared in Tel Aviv and other parts of central Israel. Iran has repeatedly targeted the Greater Tel Aviv - a metropolitan area of around 4 million people - the business and economic hub of Israel where there are also critical military assets. Iranian news agencies reported air defences were activated in central Tehran districts to counter 'enemy targets', and that Israeli air strikes hit Parchin, the location of a military complex southeast of the capital. Regime change In a post to the Truth Social platform on Sunday, Trump raised the idea of regime change in Iran. 'It's not politically correct to use the term, 'Regime Change,' but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change??? MIGA!!!' he wrote. Trump's post came after officials in his administration, including U.S. Vice President JD Vance and Defense Secretary Pete Hegseth, stressed they were not working to overthrow Iran's government. US B-2 bombers involved in Iran strikes, U.S. official says Israeli officials, who began the hostilities with a surprise attack on Iran on June 13, have increasingly spoken of their ambition to topple the hardline Shi'ite Muslim clerical establishment. Iranian Foreign Minister Abbas Araqchi is expected to hold talks with Russian President Vladimir Putin in Moscow on Monday. The Kremlin has a strategic partnership with Iran, but also close links with Israel. Speaking in Istanbul on Sunday, Araqchi said his country would consider all possible responses and there would be no return to diplomacy until it had retaliated. Russia's foreign ministry condemned the U.S. attacks which it said had undermined the Treaty on the Non-Proliferation of Nuclear Weapons. 'The risk of the conflict spreading in the Middle East, which is already gripped by multiple crises, has increased significantly,' it said. The U.N. Security Council met on Sunday to discuss the U.S. strikes as Russia, China and Pakistan proposed the 15-member body adopt a resolution calling for an immediate and unconditional ceasefire in the Middle East. U.N. Secretary-General Antonio Guterres told the Security Council the U.S. bombings in Iran marked a perilous turn in the region and urged a return to negotiations over Iran's nuclear programme.
Business Recorder
an hour ago
- Business Recorder
Bitcoin falls 4% to $99,237
Bitcoin, the world's largest cryptocurrency by market value, was down by 4.13% at $99,237 at 10:52 a.m. ET (1452 GMT) on Sunday. Pakistan allocates 2,000 MW to Bitcoin mining, AI data centers in bold digital economy push Ether, the second-largest cryptocurrency, was down by around 8.52% at $2,199.
Business Recorder
an hour ago
- Business Recorder
Goldman Sachs warns of oil price surge on Strait of Hormuz risks
Goldman Sachs flagged risks to global energy supply amid concerns over a potential disruption in the Strait of Hormuz that would lead to significant spikes in oil and natural gas prices, the bank said in a note dated Sunday. The bank estimated Brent crude could briefly peak at $110 per barrel if oil flows through the critical waterway were halved for a month and remained down by 10% for the following 11 months. Prices would then moderate, with Brent averaging around $95 per barrel in the fourth quarter of 2025, it said in a note. Oil prices jumped on Monday to their highest since January after Washington joined Israel over the weekend in attacking Iran's nuclear facilities. Goldman highlighted that prediction markets, despite limited liquidity, now reflect a 52% probability of Iran closing the Strait of Hormuz in 2025, citing data from Polymarket. Oil hits five-month high after US attacks key Iranian nuclear sites Additionally, it noted that a drop in Iranian supply by 1.75 million barrels per day could push Brent to a peak of around $90 per barrel. In one scenario, the bank said a 1.75 million barrels per day (bpd) drop in Iranian oil supply for six months, followed by gradual recovery, could push Brent crude to peak at $90 per barrel before falling to the $60s by 2026. In the second sub-scenario, where Iranian production remains persistently lower, Brent could still peak at $90 but stabilize between $70-80 in 2026 due to reduced inventories and global spare capacity, Goldman Sachs said. 'While the events in the Middle East remain fluid, we think that the economic incentives, including for the U.S. and China, to try to prevent a sustained and very large disruption of the Strait of Hormuz would be strong,' Goldman Sachs said. Iran's Supreme National Security Council must make the final decision on whether to close the Strait of Hormuz following U.S. bombing raids, Iran's Press TV said on Sunday, after parliament was reported to have backed the measure. Goldman Sachs also projected European natural gas markets, including the TTF benchmark, to price in a higher probability of disruption, with TTF potentially rising closer to 74 euros per megawatt-hour ($25/MMBtu). However, the bank noted that U.S. natural gas prices would face limited impacts due to structural factors such as strong export capacity and minimal domestic LNG import needs.
