FRANKFURT: European shares ended slightly lower on Tuesday, with industrials and banks the biggest drags as investors weighed uncertainty over US trade deals with the July tariff deadline fast approaching and discussions on a US tax bill.
The pan-European STOXX 600 index closed 0.2% lower, coming off a more than 1% fall for the month of June. Most regional bourses clocked declines, though UK’s blue-chip FTSE 100 was an outlier with a 0.3% rise.
Drugmaker AstraZeneca climbed 2.8% after the Times reported CEO Pascal Soriot was considering moving the company’s stock market listing to the US
AstraZeneca is the biggest company listed in the UK in terms of market capitalisation.
Industrials led losses among the major STOXX sub-sectors with a 1.7% fall.
Defence-related companies including Germany’s Rheinmetall , Sweden’s Saab and Italy’s Leonardo all fell more than 5% each.
Banks also slid 1.3%, with Germany’s Deutsche Bank down the most with a 3.6% decline.
Concerns about US tariffs and their impact on global growth have resurfaced, as the July 9 deadline for countries to reach deals with the US nears.
Bloomberg News reported late on Monday that the EU is open to a deal that would apply a universal 10% tariff on many of its exports, but is also seeking US commitments to reduce tariffs in some key sectors.
Also on investors’ radar this week, Senate Republicans were pushing to pass President Donald Trump’s sweeping tax-cut and spending bill that is set to add $3.3 trillion to the nation’s debt pile.
Fresh data on Tuesday showed euro zone inflation edged up last month to the European Central Bank’s 2% target, up from 1.9% a month earlier and in line with expectations in a Reuters poll of economists.
“The ECB is likely to pause after eight consecutive interest rate cuts ... one reason for this is that the exact impact of US tariffs on the euro area economies is still unclear,” Commerzbank economist Vincent Stamer said.
ECB policymakers broadly stated that the bank can wait for some time to cut interest rates. US Federal Reserve Chair Jerome Powell also reiterated that the US central bank plans to “wait and learn more”.
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