European stocks sink on trade war

EUROPEAN shares tumbled yesterday as fears a trade war could have a bigger impact than expected on China added to concerns that rising US interest rates are gradually making stock markets less attractive for investors.

A mounting clash between Rome and Brussels over the Italian government’s spending plans also soured the mood.

“The re-emergence of the Italy/EU budget deficit battle as a key market mover proved to be a disaster for the European indices,” said Spreadex analyst Connor Campbell.

Shares in Asia slumped overnight despite Beijing’s central bank increasing liquidity to offset the effects of the tariff row with the US while Wall Street started in the red.

The pan-European STOXX 600 benchmark index fell 1.1pc to its lowest close in around six months, while the export-oriented German index fell 1.4pc.

In Ireland, the Iseq Overall Index ended the session just under 1pc lower, at 6,388.99.

Homebuilder Cairn Homes slumped 3.1pc to €1.42, while rival Glenveagh Properties was 1.2pc lower at 94c.

The negative sentiment towards the homebuilders makes successfully executing a planned stock market flotation here of Dres Properties by Patrick Durkan and Lone Star in coming weeks a challenge. Shares in UK-focused Irish homebuilder Abbey advanced 3.4pc, however.

Shares in Ryanair advanced 1.1pc to €12 as its own broker, Davy, said the airline’s prospects remain solid. Insurance firm FBD saw its shares rise 3.3pc to €3.42.

The UK’s FTSE-100 fell 1.1pc. Germany’s DAX was 1.3pc lower and France’s CAC-40 declined 1.1pc.