European Stocks Succumb to Trump’s Action on China

By Investors Hub

European stocks have gone into free fall on Friday after U.S. President Donald Trump escalated his trade war with China, citing a lack of progress in trade talks.

Trump’s plan to impose a 10 percent tariff on $300 billion of Chinese imports beginning September 1 would extend tariffs to nearly all China’s imports into the United States.

While the French CAC 40 Index has plummeted by 3 percent, the German DAX Index is down by 2.7 percent and the U.K.?s FTSE 100 Index is down by 2 percent.

Specialty chemicals company Lanxess has tumbled after its second quarter sales volumes declined in the Engineering Materials and Specialty Additives segments.

Credit Agricole Group shares have also slumped. The bank reported that its second- quarter net income group share declined 12.7 percent to 1.81 billion euros from last year’s 12.08 billion euros, hit by a weak performance at its corporate and investment banking arm.

The Royal Bank of Scotland Group has also plunged despite the bank posting a sharp rise in second quarter operating pre-tax profit and declaring a special dividend.

On the other hand, shares of International Consolidated Airlines Group have rallied after airline?s quarterly profit beat forecasts.

In economic news, Eurozone producer price inflation eased notably in June, largely due to weak energy prices, data from Eurostat showed.

Producer price inflation slowed to 0.7 percent in June from 1.6 percent in May. The rate was below the forecast of 0.8 percent.

Survey data from IHS Markit showed the U.K. construction sector continued to shrink in July. The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers’ Index rose to 45.3 in July from June’s ten-year low of 43.1. The score was forecast to climb to 46.0.