European Markets Close Notably Lower On Tariff Concerns, Hot UK Inflation Data

(RTTNews) - European stocks closed lower on Wednesday as disappointing quarterly updates, U.S. President Donald Trump's fresh tariff threats, and hot inflation data from the U.K. weighed on sentiment.

Trump threatened that he might unveil new tariffs of about 25% on automobile imports, semiconductors and pharma products imported to the U.S. effective early April.

Continuing his aggressive stance on trade, Trump reiterated that America will charge reciprocal tariff to trading partners which would be 'no more, no less' levied by other countries.

The pan European Stoxx 600 fell 0.91%. The U.K.'s FTSE 100 closed down 0.62%, Germany's DAX ended lower by 1.8% and France's CAC 40 lost 1.17%. Switzerland's SMI settled lower by 0.74%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Spain, Sweden and Turkiye ended with sharp to moderate losses. Portugal declined marginally.

Denmark, Norway and Russia bucked the trend and closed modestly higher.

In the UK market, Glencore tumbled more than 7% after the company reported a drop in full-year earnings.

EasyJet, JD Sports Fashion, Anglo American Plc, Ashtead Group, Barratt Redrow, Prudential, Spirax Group and IAG ended lower by 3 to 4%.

Hiscox, Beazley, Melrose Industries, Kingfisher, Weir Group, Associated British Foods, Howden Joinery, DCC, Fresnillo, M&G, Segro and Schrodders also ended sharply lower.

Unilever, SSE, Pershing Square Holdings, Pearson, National Grid, Antofagasta and Scottish Mortgage gained 0.6 to 1.5%.

BP gained about 1.1% on reports the company is considering a potential sale of its lubricants business, Castrol. Defense giant BAE Systems, which declined sharply in early trades despite reporting strong 2024 results, recovered subsequently, and ended the session moderately higher.

In the German market, HeidelbergCement tumbed 5.5%.

MTU Aero Engines closed lower by about 4.5%. The company reported that its fourth quarter net income declined to 143 million euros from 215 million euros in the same quarter last year. Earnings per basic share was 2.56 euros, down from 3.96 euros in the previous year.

BASF, Siemens Energy, Munich RE, Daimler Truck Holding, Brenntag, Hannover Rueck, Volkswagen, BMW, Symrise, Allianz, Adidas, Siemens, Zalando, Bayer, Deutsche Bank, Porsche and Vonovia lost 2 to 4.5%.

Rheinmetall, E.ON, Infineon and Covestro ended modestly higher.

In the French market, Saint-Gobain, Hermes International, Teleperformance, Capgemini, LVMH, Renault, Airbus Group, Eurofins Scientific, Edenred, L'Oreal and AXA lost 2 to 4.3%.

STMicroElectronics surged nearly 8%. Engie and Thales closed higher by about 1.5% and 1.3%, respectively.

Data from the Office for National Statistics showed consumer price inflation rose more than expected to a 10-month high in January, with the index logging a 3% rise in the month, following December's 2.5% increase. This was the fastest growth since March 2024. Prices were forecast to climb 2.8%.

On a monthly basis, the CPI edged down 0.1%, in contrast to the 0.3% increase in December. Economists had forecast a monthly drop of 0.3%.

Excluding energy, food, alcohol and tobacco, core inflation rose to 3.7%, in line with expectations, from 3.2% in the previous month.

Another data from the ONS showed that output prices rebounded in January after falling for four straight months. Output prices gained 0.3% annually after a 0.1% drop. At the same time, the annual fall in input prices slowed to 0.1% from 1.3% in December.

On a monthly basis, output prices grew 0.5%, offsetting December's 0.2% fall. Meanwhile, input prices advanced 0.8%, faster than the 0.2% rise a month ago.

The euro area current account surplus increased to a six-month high in December, the European Central Bank said Wednesday.

The current account balance showed a surplus of EUR 38 billion in December compared to a surplus of EUR 25 billion in November. This was the highest surplus since June.