Reported by Tahir Ishaq Shehu
European equities ended Tuesday’s session on a mixed note, as renewed global trade tensions, lackluster German export data, and a general absence of fresh macroeconomic drivers weighed on sentiment. The pan-European STOXX 600 index was little changed, closing marginally lower at 543.22, as investors adopted a cautious and reactive stance.
Key Index Movements
FTSE 100 (London): Fell 0.4%, pressured by declines in financials and real estate stocks.
DAX (Germany): Dropped 0.2%, as disappointing export data dented investor confidence.
CAC 40 (France): Edged 0.1% lower.
Euro Stoxx 50: Down 0.2%, mirroring broad caution across the eurozone’s blue chip firms.
Sector Performance
Trading reflected a defensive tilt, with investors rotating between cyclicals and safe-haven sectors:
Real Estate: Led losses, down 0.6%, amid ongoing worries over rising interest rates and softening demand in commercial property markets.
Basic Resources: Gained 0.7%, supported by rising metals prices driven by optimism about Chinese demand and tightening supply chains.
argenx SE, the Belgian biotech firm, rose 1.4% following a “Buy” upgrade from Deutsche Bank, which cited promising clinical trial results in its immunotherapy pipeline.
Germany’s Export Slump Raises Alarm
Germany’s economic challenges intensified with new data showing exports dropped 3.1% month-over-month in May well below expectations. This marked the second consecutive monthly decline, with shipments to the United States particularly weak.
The numbers further highlight the vulnerability of Europe’s largest economy, already grappling with stagnating industrial activity and stubborn inflation. Analysts warned that global protectionism and subdued foreign demand could continue to erode Germany’s export led growth in the coming months.
Global Trade Jitters
Investor anxiety was compounded by the U.S. administration’s announcement of new tariff notifications targeting 14 countries, including Japan, South Korea, India, and Brazil. The proposed 25% tariffs, set to take effect on August 1, span a broad array of industrial and consumer goods.
Although the European Union was not directly named, Brussels remains engaged in tense negotiations with Washington. EU officials are seeking exemptions but have hinted at potential retaliatory measures if European exports come under fire.
Commodities and Currency Snapshot
Brent Crude: Down 0.5% to $84.10 per barrel, as demand worries outweighed OPEC+ supply cuts.
Gold: Held firm above $2,340/oz, buoyed by safe-haven flows.
Euro: Slightly stronger at $1.091.
British Pound: Steady around $1.281.
Safe-Haven Currencies: Swiss franc and Japanese yen posted modest gains.
Market Sentiment and Outlook
With geopolitical uncertainty on the rise and the August 1 tariff deadline looming, markets remain in a defensive mode. Analysts expect low trading volumes and cautious positioning through July, especially ahead of key monetary policy decisions from the European Central Bank and Bank of England.
While volatility has so far been contained, many believe risks could intensify in the weeks ahead if trade tensions escalate or economic indicators deteriorate further.
