European stocks ended lower on Monday as investors were greeted with fresh US-China tensions following a May Day break, after Washington threatened tariffs against China over the coronavirus.
Sectors sensitive to economic growth, including oil and gas, automakers and banking, were rattled, while the mood wasn’t helped by data showing that euro-zone manufacturing activity collapsed through April.
The Iseq index closed down 3.9 per cent, in line with European markets, with equities never quite recovering from the session's early plunge. Ryanair, which on Friday said it would take two years for passenger numbers to return to normal, plummeted 11 per cent to €9.25 on a bad day for airline stocks in both Europe and the US.
The banks slipped again, with Bank of Ireland closing almost 6.4 per cent lower at €1.73 and AIB down 6.2 per cent at €1.17. Dalata Hotel Group, which has been trying to recover lost ground in recent weeks, fell 6.7 per cent to €2.77.
Building materials group CRH was another faller, declining 2.4 per cent to €26.88, while packaging company Smurfit Kappa dropped 2.6 per cent to €27.88. Glanbia was one of the few stocks to finish higher, with the food group adding 0.5 per cent to €9.72.
Britain’s FTSE 100 closed lower, as the drag posed by trade tensions outweighed gains for drugmakers and oil giants. After falling nearly 1 per cent at one point, the internationally-focused FTSE 100 ended down 0.2 per cent as a drop in the pound boosted some exporters. Midcap stocks fell 1.2 per cent.
UK shares still outperformed continental European counterparts, which took a bigger hit on a return to trading after the May 1st holiday.
Aero-engine maker Rolls Royce was among the biggest decliners, falling 6.9 per cent on news it is considering cutting up to 15 per cent of its workforce.
Travel and leisure stocks also fell, with shares in EasyJet, Aer Lingus-owner IAG and Intercontinental Hotels Group falling between 4.2 per cent and 7.2 per cent. Broadcaster ITV declined 4.1 per cent as it cancelled the 2020 series of Love Island.
Oil majors Royal Dutch Shell and BP gained 2.7 per cent and 0.6 per cent respectively even as oil prices were mixed. The wider pharmaceuticals and biotechnology index rose 2.5 per cent, with Hikma jumping 5.9 per cent.
The pan-European Stoxx 600 closed 2.7 per cent lower in a downbeat start to the month, having risen 6 per cent in April on hopes of major economies re-emerging from virus lockdowns.
European oil and gas stocks were among the worst performers for the day, tracking a tumble in oil prices. The sector was already on shaky footing after a crash in crude prices last month.
Germany's ThyssenKrupp plunged 14 per cent to the bottom of the Stoxx 600 after its management board told staff in a letter that the pandemic could cause a new financial squeeze despite the sale of its elevator business.
In Frankfurt, the Dax fell 3.6 per cent, while France's Cac 40 dropped 4.2 per cent as shares in automakers PSA and Renault retreated on data showing French car registrations slumped by almost 89 per cent in April.
The S&P 500 and Dow Jones dropped following the US-China spat about the origins of the coronavirus outbreak, while major carriers slumped after billionaire Warren Buffett's Berkshire Hathaway dumped its stakes in the sector.
Delta Air Lines, American Airlines, Southwest Airlines and United Airlines fell between 7.5 per cent and 10 per cent, after Buffett said at the weekend that "the world has changed" for the industry.
Berkshire’s announcement also shaved more than 3.3 per cent off Boeing’s shares. Berkshire itself posted a record loss of nearly $50 billion, sending its shares down 3 per cent and weighing heavily on the financials sector. – Additional reporting: Reuters