European Stocks Close Weak As Trade War Fears Hurt Sentiment

(RTTNews) - European stocks closed lower on Friday as trade war fears resurfaced after U.S. President Donald Trump announced a 35% tariff on Canadian goods, effective August 1, 2025, and warned of a blanket tariff of 15-20% on most trading partners.

Trump also said he would make an announcement regarding Russia, raising the prospect of more sanctions on the major oil producer.

Weak GDP data weighed on the British market.

The pan European Stoxx 600 fell 1.01%. The U.K.'s FTSE 100 closed down 0.38%, Germany's DAX lost 0.82% and France's CAC 40 ended 0.92% down, while Switzerland's SMI tumbled 1.6%.

Among other markets in Europe, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Russia, Spain and Sweden ended with sharp to moderate gains.

Norway and Portugal posted modest gains. Poland and Turkiye closed higher, while Iceland ended flat.

In the UK market, JD Sports Fashion, GSK, WPP, Smith & Nephew, Croda International, Spirax Group, Diageo, Barratt Redrow, Persimmon, Hikma Pharmaceuticals, Natwest Group, Reckitt Benckiser and AstraZeneca closed down 1.4 to 3.2%.

Fresnillo gained about 3.5%. BP climbed nearly 3.5% after the oil and gas giant said it expects higher oil output and strong trading performance in the second quarter.

Endeavour Mining, British American Tobacco, Aviva, Rolls-Royce Holdings, BAE Systems and Phoenix Group Holdings gained 1 to 2.7%.

In the German market, Puma ended nearly 4% down. Siemens Healthineers closed lower by about 3.7%. Brenntag, Sartorius, Qiagen, Daimler Truck Holding, Commerzbank, Adidas, BASF, SAP, Siemens, Henkel, Bayer and Beiersdorf lost 1.4 to 2.5%.

Siemens Energy climbed nearly 2%. RWE, MTU Aero Engines and E.ON posted moderate gains.

In the French market, STMicroElectronics tanked more than 16%. Stellantis, Kering, Capgemini, LVMH, Edenred, Essilor, Teleperformance and L'Oreal lost 3 to 4.7%. BNP Paribas, Renault and Credit Agricole also declined sharply.

Thales gained nearly 2%. Safran, Engie, TotalEnergies and Veolia Environment also closed

Data from the Office for National Statistics said U.K.'s GDP fell 0.1% in May, following a 0.3% drop in April, due a sharp fall in industrial output.

In the three months to May, U.K.'s real GDP grew 0.5% compared with the previous three months. GDP expanded 0.7% in May from the previous year.

Another data from the ONS showed that the visible trade deficit narrowed to GBP 21.7 billion in May from GBP 22.4 billion in the previous month. At the same time, the surplus on services trade increased to GBP 15.99 billion from GBP 15.9 billion a month ago.

As a result, the total trade balance showed a deficit of GBP 5.7 billion, which was below April's GBP 6.5 billion deficit.

Germany's wholesale price inflation accelerated in June largely reflecting higher prices of food and beverages, data from Destatis showed.

Wholesale prices grew 0.9% on a yearly basis in June, following April's 0.4% increase. The increase in June was the fastest in three months.

Destatis said the main reason for the annual growth was higher prices of food, beverages and tobacco, with prices up 4.2%.

The wholesale selling prices of non-ferrous ores, non-ferrous metals and non-ferrous semi-finished metal products also increased substantially. By contrast, wholesale of solid fuels and mineral oil products logged a notable decline.

Month-on-month, wholesale prices gained 0.2% in June, partially offsetting the 0.3% fall a month ago.

Final data from the statistical office INSEE showed FrancFranc's consumer price inflation increased in June, at a faster than previously estimated pace.

Consumer price inflation increased to 1% in June from 0.7% in May. June's inflation was revised up from 0.9%. Similarly, EU harmonized inflation was revised to 0.9% from 0.8%.

Month-on-month, the France's consumer price index climbed by revised 0.4%, reversing a 0.1% drop in May. The flash estimate showed a 0.3% rise in consumer prices.

The harmonized index of consumer prices gained an unrevised 0.4%, in contrast to the 0.2% fall in May.