Markets fall on fresh Italy eurosceptic power fears

By Helen Reid

European shares ended the day deep into the red after an early bounce, shaken by the appointment of eurosceptics at key positions in the Italian parliament and after German carmaker Daimler warned higher tariffs would hit profits.

Motor stocks fell 3.5% — the biggest loss in about two years, while the pan-European Stoxx 600 tumbled 0.9% as fears about the ongoing US-China trade dispute lingered on.

“The standoff between the US and China is not any closer to being resolved and traders are fearful President Donald Trump will turn up the heat on the EU next,” said David Madden, a market analyst at CMC Markets.

Equity markets have been relatively resilient in the face of mounting trade concerns but fell broadly this week as MrTrump threatened additional tariffs on $200bn worth of Chinese goods.

Daimler became one of the biggest global firms to cut its guidance on trade tensions, warning profits would be hit in part by Chinese tariffs on car imports from the US.

Daimler shares fell 4.3% to their lowest in nearly two years.

Volkswagen fell 3.1% and BMW 2.9% while Germany’s Dax, which counts many heavy exporters among its constituents, fell 1.4%.

Financials stocks were the biggest drag in Europe after two leading eurosceptics from Italy’s far-right League were named to head parliamentary finance committees.

Italy’s Ftse MIB fell 2% with the country’s banking index down 2.2%, while Italian bond yields rose amid renewed fears about the new populist government.

University professor Alberto Bagnai, who was named head of the Finance Committee in the Senate, published Il tramonto dell’euro (The sunset of the euro) in 2012.

US stocks also fell, with the Dow marking an eighth straight decline, as industrials wobbled again on trade war concerns while Amazon and other online retailers weakened after a US Supreme Court ruling on state sales tax collection.

The Dow Jones Industrial Average fell 196.1 points, or 0.8 percent, to 24,461.7, the S&P 500 lost 17.56 points, or 0.63 percent, to 2,749.76 and the Nasdaq Composite dropped 68.56 points, or 0.88 percent, to 7,712.95.


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