Europe close: Stocks fall on tariff fears, but FTSE 100 stays flat
By Benjamin Chiou
Date: Friday 04 Jul 2025
(Sharecast News) - European stocks bounced off their lows but still finished firmly lower on the back concerns about the potential imposition of new tariffs on the continent's exports to the US.
Donald Trump said on Thursday that letters imposing unilateral tariffs will start to be sent out to 10 or 12 US trading partners, starting Friday, with duties ranging between 10% and 70%.
Ahead of the 9 July deadline when the 90-day pause is scheduled to end, Trump said: "We're probably going to be sending some letters out, starting probably tomorrow, maybe 10 a day to various countries saying what they're going to pay to do business with the US."
Markets across Europe were firmly in the red on Friday - the FTSE 100 being the only exception, finishing flat given the UK has already signed its own trade deal with America - the Stoxx 600 index closed 0.5% lower at 541.06, with markets at Paris, Milan and Madrid falling by at least 0.8%.
"Without interest from US traders European markets have found it hard to sustain the positive momentum seem yesterday," said Chris Beauchamp, chief market analyst at IG.
"For once the UK's separation from the EU meant that it was spared any downside today, the index holding on flat for the day. As one of the few countries to have successfully negotiated a 'trade deal' with the US this means UK investors don't have to worry about this problem."
Economic data disappoints
A raft of economic news from the eurozone came in under expectations on Friday.
The eurozone producer price index fell by 0.6% in May, slowing significantly after a 2.2% drop in April - its strongest decline in two years - but more than the -0.5% consensus forecast. The annual rate of inflation of factory gate inflation slowed from 0.7% to 0.3%, its lowest in five months.
The HCOB construction purchasing managers' index fell to 45.2 in June from 45.6 in May, signalling a steeper contraction in overall output. This was led by accelerated declines in both residential and commercial building, with housing remaining the worst-performing segment.
Meanwhile, German factory orders slumped 1.4% in May following a revised 1.6% increase in April. This was the first decline since January and well below the 0.1% fall expected by analysts.
Market movers
Mining stocks in London were among the worst performers of the morning, including Anglo American, Antofagasta and Glencore as LME three-month copper prices fell 1% to $9,854 a metric ton. Prices surged to almost the $10,000 mark on Thursday - their highest this year - as traders rushed to beat ahead of the potential imposition of new US tariffs.
Shares in British online gift card retailer Moonpig dropped 9% after Deutsche Bank downgraded the stock to 'hold' from 'buy' and cut the price target to 235p from 290p.
Air France-KLM rose on the bak of plans to raise its interest in Danish airline SAS from 19.9% to 60.5% for an undisclosed amount.
Alstom was also slightly higher in Paris after the trainmaker reported a €2bn railcar order from the New York Metropolitan Transportation Authority.
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