[BENGALURU] European shares closed slightly lower on Thursday (Apr 17) after the European Central Bank (ECB) eased borrowing rates as expected, while investors parsed corporate earnings to gauge the fallout of US President Donald Trump’s erratic trade plans.
The pan-European Stoxx 600 index ended 0.1 per cent lower, though clocked a more than 4 per cent weekly jump in a holiday-shortened week.
Trading Volumes were relatively lower on Thursday ahead of a four-day weekend on account of Good Friday and Easter Monday.
The ECB cut interest rates for the seventh time in a year, bringing the deposit rate to 2.25 per cent in a move to prop up confidence in an already struggling economy as tariffs curb trade and uncertainty weighs on consumption and investment.
“With so much uncertainty and inflation finally returning to target, the last thing the ECB wants to do is loosen too early and jeopardise that trajectory,” HSBC economists said.
“And while looser policy can help counter a global slowdown, it can’t do much to influence US trade policy or fix any associated damage to supply chains, or even push firms to borrow more to invest despite the uncertainty.”
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European earnings season was well and truly underway with France’s Hermes losing 3.2 per cent after the Birkin bag maker posted a rare quarterly sales miss, joining rival LVMH, which also reported sales below expectations this week.
Analysts have pared their forecasts for European corporate profitability as tit-for-tat tariffs have dimmed the global growth outlook, triggering market volatility that is reminiscent of the early days of Covid-19.
The Stoxx 600 is down about 10 per cent from its March record closing high, and more than 5 per cent down from levels seen before Trump’s now-delayed reciprocal tariffs sparked a global market rout.
US Federal Reserve chair Jerome Powell acknowledged that the country’s economic growth appears to be slowing, but added that the Fed would wait for more data before changing interest rates, causing a sell-off on Wall Street overnight.
Tech stocks and euro zone banks were the top sub-sector laggards in Europe on Thursday, down more than 1 per cent each.
On the flip side, elevated crude oil prices lifted energy stocks 1.6 per cent higher.
Siemens Energy jumped 10.5 per cent after the German energy group raised its outlook for the current fiscal year and posted its best profit margin since being spun off from former parent Siemens.
Rentokil Initial rose 5 per cent after the British pest control firm said its organic revenue increased nearly 2 per cent in the first quarter. REUTERS
