FRANKFURT: European shares clocked their 10th straight weekly gain on Friday, continuing their stellar run into the new year though sentiment was shaky towards the end of the week amid trade tariff threats from US President Donald Trump.
The pan-European STOXX 600 index ended flat, but closed higher for the week and extended its longest winning streak since early 2024.
Technology stocks led declines with a 1.5% loss, following a selloff on Thursday in US AI darling Nvidia after its earnings report.
Chip equipment manufacturer ASML slipped 2.9%.
Mining stocks followed with a 0.7% decline, tracking lower prices of gold and copper, pressured by a strong dollar and Trump’s tariff plans.
Trump’s pledge of an additional 10% levy on Chinese imports brought luxury stocks into the limelight. LVMH, Christian Dior and Kering, however, closed well off their session lows.
However, data showing a slowdown in the annual increase in US inflation supported hopes of a Federal Reserve interest rate cut in June, helping sentiment recover.
“We’ve had a bit of a pullback after a period of relatively firm European markets … I would infer that some of this is being driven by sentiment towards tariffs,” said Richard Flax, chief investment officer at Moneyfarm.
Trump on Wednesday floated a 25% tariff on cars and other goods from the European Union.
Upbeat corporate earnings, optimism around Russia-Ukraine peace talks and a rally in German defence stocks amid hopes of higher defence spending under the incoming government had helped the benchmark shine earlier this week.
Though worries over escalating global trade tensions saw European equities run into turbulence in the second half of the week.
On Friday, data showed euro zone inflation prospects improved while growth remained anaemic, solidifying the case for further cuts from the European Central Bank, which is widely expected to cut rates by at least 25 basis points next week.