Europe: Shares drop as trade optimism wanes, geopolitical tensions rise

EUROPEAN equities logged their fourth consecutive decline on Thursday as trade optimism dimmed, while mounting geopolitical tensions prompted a pullback from risk assets.
The pan-European Stoxx 600 closed 0.33 per cent lower at 549.84, after touching its lowest levels in over a week during the session.
This extended selloff marks its longest daily losing streak in over two months.
The primary catalyst was the persistent lack of clarity surrounding global trade policy. US President Donald Trump on Wednesday announced a willingness to extend trade talk deadlines while indicating it might not be 'necessary' as 'offer letters' are imminent.
While recent talks with China resulted in a deal, they failed to dismantle existing tariffs or resolve long-standing structural trade imbalances.
Treasury Secretary Scott Bessent said the European Union had been slower in presenting robust proposals, but was now showing 'better faith'.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
However, markets were sceptical about an EU-US deal before Trump's July 8 deadline, when the tariff pause expires.
Geopolitical worries fueled more market caution after Trump said some US personnel were being moved out of the Middle East amid rising tensions with Iran.
'If Israel were to strike Iran, the consequences ... would depend on the severity of Iran's retaliation,' said James Swanston, senior economist at Capital Economics.
Surging oil prices provided a tailwind for the energy sector to become the session's standout performer.
Utilities, often traded as a bond proxy, gained 0.8 per cent, in tandem with Eurozone bond prices.
Travel and leisure dropped the most among sectors. Boeing shares fell 8 per cent after one of its jets operated by Air India crashed in India's Ahmedabad, claiming more than 200 lives.
London's FTSE 100 gained 0.2 per cent. Fresh data highlighted a sharp deceleration in Britain's economy in April, partly due to Trump's tariffs and subdued consumer spending.
'The Bank of England will almost certainly leave interest rates steady at its June meeting and will keep its options open for the subsequent meeting in August,' said Paul Dales, chief UK economist at Capital Economics.
European Central Bank executive board member Isabel Schnabel said ECB interest rates are in a 'good place' despite an expected slowing of inflation.
Traders see just one more 25 basis point cut by the end of 2025.
Among stocks, BE Semiconductor Industries (BESI) rose 3.6 per cent after raising its long-term financial targets ahead of its investor day.
Halma gained 3.3 per cent after the health and safety device maker's annual adjusted pretax profit beat expectations. REUTERS

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Straits Times

24 minutes ago

• Straits Times

Tapping rivers, lakes for climate action in S-E Asia could avert 25% GDP loss by 2050: Report

In climate action, adaptation has long been the overlooked sibling of mitigation, or emissions-cutting efforts. PHOTO: AFP Tapping rivers, lakes for climate action in S-E Asia could avert 25% GDP loss by 2050: Report SINGAPORE – The impacts of climate change are expected to claim up to 25 per cent of South-east Asia's GDP by 2050, but such losses can be avoided if countries turn to their snaking rivers and majestic lakes for solutions, says a new report. It is high time to ramp up measures to shield against powerful typhoons, rising seas and heatwaves, and water is well-suited to be the starting point for adaptation efforts, said the report produced by the World Economic Forum and the Singapore International Foundation . About 90 per cent of all extreme weather events are related to water, which also exacerbates other climate hazards. Larger amounts of water vapour in the atmosphere act as fuel for severe storms, while heatwaves and wildfires are related to drought. South-east Asia needs to prepare quickly for the impacts of climate change, yet these adaptation efforts remain under-prioritised and under-supported, said the report released on June 23. A major hurdle is the difficulty in grasping adaptation, as it is often perceived as broad and all-encompassing, noted the paper. Climate adaptation involves protecting people from the impacts of climate change, such as building sea walls to guard against rising sea levels and cooling centres during heatwaves. 'Because it is difficult to measure, the returns on investment in climate adaptation are challenging to define,' said the report. It aims to shift the perception of adaptation by highlighting the importance of the move and quantifying the investment needed. For example , an investment of about US$13 billion (S$16 billion) is needed by 2030 to fortify South-east Asia's adaptation and resilience to various types of flooding beyond existing methods such as irrigation systems and controlling stormwater flow. 'Businesses and investors have a direct interest in backing (adaptation) strategies. It reduces their exposure to risk and ensures business continuity when crisis strikes,' said the report. In climate action, adaptation has long been the overlooked sibling of mitigation, or emissions-cutting efforts. But it has started to gain traction in recent months amid worsening climate impacts. In 2024, global temperatures exceeded 1.5 deg C above pre-industrial times for the first time. Singapore is among the countries preparing a national adaptation plan to guard against climate impacts like sea-level rise and extreme heat. To help policymakers design water-centric adaptation measures, the report outlined a framework focusing on four key areas: reducing damage brought by floods, enhancing alternative sources of water, incorporating technologies and artificial intelligence (AI), and developing financial tools to raise money for adaptation projects. The framework focused on case studies that the region can emulate, such as Belize's five-year project to protect its coasts and reduce pollution and wastewater discharge into the ocean, while protecting the nation's coral reefs. The Central American project, announced in early 2025, will include mangrove planting and harnessing of wetlands to help clean wastewater. While US $32.23 million has been raised – which includes funding from the World Bank's International Development Association – other forms of innovative financing such as carbon credits and blue bonds are expected to be unlocked. Blue bonds are a form of loans given out specifically to protect the ocean, and green bonds are similar loans for environmental projects. Between 2020 and 2023, water-related green bonds grew 30 percentage points faster than the overall green bond market. The Belize project could inspire similar ones in the coastal cities of the Philippines, Indonesia and Vietnam, added the report. On the use of AI, the report highlighted an 11-year-old project in the region called Servir-Mekong, which provides satellite data to help countries along the Mekong River predict and prepare for floods and droughts. The AI system has helped more than 60,000 households in Vietnam's Ninh Thuan province plan and optimise their water usage in the fields. It is the first large-scale, AI-powered water management initiative in South-east Asia. The report comes on the heels of a few other climate adaptation-focused papers published in 2025, which quantified the global investment potential of protecting people from climate change. A May report by global management consultancy BCG and Singapore's investment firm Temasek shows that expenditure for climate adaptation and resilience is projected to rise to between US$500 billion and US$1.3 trillion a year by 2030. They said hazard warning systems, flood pumps and barriers, as well as emergency medical services were among solutions identified as having the most investment potential. An earlier report by Singapore sovereign wealth fund GIC found that adaptation strategies, such as flood protection and cooling systems, could by 2050 make up a sizeable investment opportunity worth US$9 trillion. Shabana Begum is a correspondent, with a focus on environment and science, at The Straits Times. Find out more about climate change and how it could affect you on the ST microsite here.

Business Times

an hour ago

• Business Times

Montage is said to hire banks for US$1 billion Hong Kong listing

[HONG KONG] Chinese chip designer Montage Technology has hired banks for its planned Hong Kong listing that could raise about US$1 billion, according to sources familiar with the matter. The Shanghai-listed company is working with China International Capital Corporation (CICC), Morgan Stanley and UBS Group on the potential share sale, the sources said, asking not to be identified because the information is not public. Montage Technology said on Friday (Jun 20) that it was planning a Hong Kong listing, without providing further details. Deliberations are ongoing and plans may change, the sources said. A representative for UBS declined to comment. CICC, Morgan Stanley and Montage Technology did not immediately respond to requests seeking comment. Montage Technology listed on Shanghai's Nasdaq-style Star Board in 2019 and has a market capitalisation of about 93 billion yuan (S$16.7 billion). The US has been trying to curb Beijing's ambitions to build a domestic semiconductor industry, initially cutting China off from equipment used to make the most advanced electronic components and gradually broadening the rules. Chinese companies listed on mainland stock markets have been flocking to sell shares in Hong Kong as regulators give such deals their blessing and onshore fundraising remains constrained. The listings form the bulk of Hong Kong's pipeline of first-time share sales and have been a key driver of the resurgence in activity seen in the financial hub. BLOOMBERG

Business Times

2 hours ago

• Business Times

Hong Kong's New World Development actively engaged' with creditors on loan refinance

[BENGALURU] Hong Kong's New World Development said on Monday (Jun 23) it remains 'actively engaged' with creditors to refinance existing loans and that talks are ongoing. The update follows media reports that the Hong Kong property developer, which has one of the highest debt ratios among its peers, is nearing a loan refinancing deal. Last week, Bloomberg News reported that the company was close to securing a HK$87.5 billion (S$14 billion) deal, citing sources with knowledge of the matter. Markets are closely watching New World's debt issues, wondering if they might signal a sector crisis similar to the one that hit mainland China in 2021. The company paid US dollar bond interest, due on Jun 16, Reuters reported earlier this month, citing sources, after the developer flagged it would defer coupon payments worth US$77.2 million on four perpetual bonds scheduled for June. REUTERS