European shares dropped on Friday after President Donald Trump intensified tariff threats against the EU, casting doubt on trade talks and dampening investor confidence.
The pan-European STOXX 600 index fell 0.7% to 548.98 points by mid-morning but remained on course for a weekly gain. Germany’s DAX declined 0.9%, France’s CAC 40 lost 0.8%, Spain’s IBEX dropped 0.6%, and the UK’s FTSE slipped 0.3% after briefly hitting a record high.
The drop followed Trump’s announcement of a 35% tariff on Canadian imports from 1 August, alongside warnings of a 15–20% tariff hike for other countries, including the EU. He also suggested a formal notice on EU tariffs could arrive by Friday, shaking hopes of a constructive deal.
"The recent DAX rally was built on expectations of better trade ties with the U.S., but this development challenges that optimism," said Jochen Stanzl of CMC Markets.
European banks led losses, with the banking index down 1.3%. Norway’s DNB fell 7.8% after disappointing earnings, while energy stocks gained 0.4% as BP reported strong Q2 output. Gjensidige rose 5.8% and Storebrand climbed 3.5% after strong earnings.
ECB’s Isabel Schnabel, meanwhile, noted that another rate cut is unlikely in the near term, citing resilient euro zone growth and stable inflation at 2%.
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Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan have concluded talks in Bishkek, the capital of Kyrgyzstan, as leaders gather for the Shanghai Cooperation Organisation (SCO) summit.
Iran has reached an understanding with Oman on transit arrangements through the Strait of Hormuz, but the waterway will remain closed until the U.S. fulfils its commitments, a senior Iranian diplomat said on Saturday.
U.S. forces struck two Iranian rocket launchers on Larak Island on Sunday, with Tehran responding by launching ballistic missiles at two U.S. bases in Jordan in the first direct U.S.-Iran military escalation in weeks.
Russia views NATO’s growing military activity in the Arctic as a direct threat to its national security, Foreign Minister Sergei Lavrov said.
At least 37 people were killed after a Russian drone strike hit an ammunition depot in the Kyiv region, triggering powerful secondary explosions President Volodymyr Zelenskyy said on Saturday, vowing to punish suspected negligence in the second such incident in two months.
Volkswagen is heading towards a decisive showdown with labour representatives as Germany's largest carmaker weighs sweeping restructuring measures that could lead to factory closures and tens of thousands of job losses.
Online fast-fashion retailer Shein is seeking to raise up to $1.77 billion in a Hong Kong IPO after its valuation fell around 70 per cent from its private-market peak four years ago.
Kazakhstan has received a fresh vote of confidence in its economy after S&P Global Ratings upgraded the country’s credit rating, citing stronger public finances, solid reserves and steady economic growth.
AnewZ Business Europe, a new weekday programme, takes viewers inside companies driving growth and innovation across the continent, with Brickken CEO Edwin Mata joining the programme for its first episode with host Chief Global Editor Guy Shone. The show airs every Friday.
Once associated mainly with Muslim-majority countries, Islamic finance has become a global industry. Its assets reached around $5.98 trillion in 2024, according to ICD-LSEG, as more countries explore Shariah-compliant finance.
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