Europe close: Markets red amid trade concerns, weaker euro
European stock markets continued to slide on Thursday, amid continuing trade tensions and despite a weaker euro.
The common currency was down 0.4% to $1.1613 against the dollar after a hawkish language alongside the US Federal Reserve's no-change decision overnight.
It also fell against sterling after the Bank of England hiked interest rates to 0.75% from 0.5%, though after comment from the Old Lady suggested there would be little further tightening for some time, the single currency spiked.
It later fell back 0.29% to 89.1p.
Earlier, European bourses quickly moved into the red amid further stoking of trade tensions between the US and China.
Unimpressed with the White House's renewed trade tariff threats, including the potential for import tariffs on $200bn of Chinese goods of a more punitive 25%, Beijing said on Thursday it would not stand for Washington's “carrot-and-stick” tactics.
“China is fully prepared and will have to retaliate to defend the nation’s dignity and the interests of the people, defend free trade and the multilateral system, and defend the common interests of all countries,” China’s Ministry of Commerce said in a statement.
Geopolitical tensions were ramped up by the US Treasury, which placed sanctions on Turkey's justice and interior ministers following the detention of an American pastor, which sent the country's currency and main stock market gauge sliding.
Against that backdrop, the benchmark Stoxx 600 finished down 0.82% at 386.65, alongside a 1.5% fall on the German DAX to 12,546.33 and a 1.73% decline for Italy's FTSE MIB to 21,414.72.
France's CAC 40 was down 0.68% at 5,460.98, and Spain's IBEX 35 lost 1.03% to 9,698.20.
In macroeconomic data, eurozone producer prices fell less than expected, down 0.4% month-on-month in June, from the 0.8% rate in May, higher than the 0.3% expected.
Year-on-year the producer price index was up 3.6%, accelerating from 3.0% a month before, and higher than the 3.5% consensus forecast.
In Frankfurt, shares in Siemens fell 4.69% after third-quarter profit fell, chiefly due to underperformance at its oil and gas unit.
BMW skidded 0.39%, despite the car manufacturer's second-quarter profits falling less than expected.
Increased investment in electric and autonomous cars and currency headwinds saw underlying operating profits fall to €2.74bn, beating the €2.69bn analysts expected, with management brushing off concerns about new anti-pollution rules and global trade tensions.
Bayerische Motoren Werke also said it would open a unit focused on electric car batteries in early 2019, which would purchase its own raw materials for battery cells, especially cobalt.
“At times when others are struggling, they are rock solid, and they don’t seem to have an issue with WLTP,” said analysts at Evercore.
Hugo Boss stumbled 7.81% after the high-end suit peddler posted flat operating profits for the second quarter in comparison to a year ago, despite a 6% jump in sales to €653m in local currency terms.
On the upside, food wholesaler Metro surged 8.65% after the German group said it expects earnings and sales to rise in the full year.
In the UK, Rolls-Royce gained 4.45% after the aircraft-engine maker boosted its full-year outlook, while Barclays and Aviva dipped lower despite both issuing confident full year guidance as both issued mixed half-year results.