European shares fall on trade fears over Chinese tariffs

European shares fell on Monday, continuing a sell-off that began last week as China unveiled retaliatory tariffs on US goods, stoking concerns of an all-out trade war. China said it would impose higher tariffs on most US imports on a revised $60 billion target list, chilling risk appetite the world over as it hit back at a tariff hike by Washington which came into force on Friday.

Meanwhile, Vodafone, the most widely held stock by Irish investors, was rattled by reports that the mobile phone group will slash its dividends to pay for expensive fifth-generation mobile phone spectrum bids.

The pan-European STOXX 600 index dropped 1.2 per cent, with all sub-sectors apart from utilities declining.

DUBLIN

The Iseq index of Irish shares fell by 1.5 per cent to 6,151.57, with industrial heavyweights CRH down 1.7 per cent at €28.05, and Smurfit Kappa off 3.1 per cent at €25.11, as trade tensions between the US and China threatened global growth.

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Banking stocks were mixed, with Bank of Ireland off 2.6 per cent at €5.16 ahead of the group's annual general meeting (agm) on Tuesday. However, shares in Permanent TSB, which also holds its agm on Tuesday in Dublin, managed to edge 1.5 per cent higher to €1.40.

Glanbia edged 0.3 per cent higher to €16.05, with analysts at Cantor Fitzgerald highlighting to clients that the nutrition group's recent price drop was "unwarranted".

LONDON

The FTSE 100 ended down 0.6 per cent, while the FTSE 250 tumbled 1.2 per cent on Monday, led by a slump in Metro Bank.

Vodafone, which has over 330,000 Irish investors on its shareholder register, tumbled 5.2 per cent on its worst day in nearly five years after the Times reported that the world's second-biggest mobile operator was set to slash dividends to pay for auctions for mobile phone airwaves in Germany and Italy.

Brexit worries also weighed on sentiment, amid a lack of clarity over where cross-party talks were headed and growing calls for prime minister Theresa May’s departure.

UK-focused banks and industrial groups traded in the red on both indexes.

ITV slipped 6.3 per cent to be the worst performer on the FTSE 100. The broadcaster said The Jeremy Kyle Show, one of Britain's best-known daytime television programmes, was taken off-air indefinitely after a guest died a week after appearing on the talk show.

But a notable blue-chip gainer was Centrica, owner of British Gas and Bord Gáis Energy, which added 3 per cent after maintaining its annual operating cash flow and net debt forecast and as defensive stocks were in demand.

Metro Bank, which has lost more than two-thirds of its value this year, fell 11 per cent. It said on Friday its plan to raise equity was well advanced, while a Financial Times report on Sunday said it was looking to sell loans that were hit by an accounting error.

EUROPE

Banks slid, with Deutsche Bank and UBS falling 2 per cent and 2.1 per cent, respectively. Talks between the German banking giant and the Swiss lender to tie up their asset management businesses have stalled, according to reports, mainly over which bank would control the combined entity.

Thyssenkrupp shed 8.7 per cent. Short-sellers scrambling to unwind their bearish bets had sparked a record gain in the German firm's stock on Friday, when it said it would embark on a fresh restructuring and list its elevators business.

NEW YORK

US stock markets were lower in early afternoon trading, as investors monitored the US-China situation.

At the heart of the sell-off were shares in major technology companies including Apple, as well as chipmakers, manufacturers and retailers that draw large chunks of their revenue from China.

Shares of Uber Technologies dropped 9 per cent, more than doubling their losses since the ride-hailing giant's poorly received Wall Street debut on Friday.

Banks, which suffer from the fall in long-term rates below short-term funding costs, also fell.

Slack Technologies, the owner of the workplace instant messaging app, plans to go public on June 20th, the company said on Monday. Slack is seeking to go public via a direct listing instead of an IPO, which has been the traditional route to the public markets for companies like Google parent Alphabet, Facebook and Uber.

A direct listing is purely a way for existing shareholders to sell stock. Music streaming app Spotify Technology last year went public via a direct listing.

– Additional reporting: Reuters