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Share Price: 520.40
Bid: 521.20
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Change: -2.90 (-0.55%)
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Open: 526.00
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UPDATE 1-European shares hit by Bayer, Lufthansa; FTSE shines

Tue, 30th Jul 2019 09:31

* STOXX 600 posts worst fall since May

* Trump tweets hit trade-sensitive German shares

* Irish stocks hurt by Brexit woes(Updates to close)

By Susan Mathew and Medha Singh

July 30 (Reuters) - Europe's main STOXX 600 index posted itsworst session since a selloff in May on Tuesday after U.S.President Donald Trump ramped up his trade rhetoric againstChina, deepening wounds left by a batch of weak economic dataand corporate earnings.

The pan-European equities index closed down 1.5% inheavy trading and Germany's trade-sensitive stocks hita six-week low after Trump warned China against waiting out hisfirst term in office to finalise any trade deal.

Automakers, sensitive to trade headlines, fell 2.3%.But banks led declines among European sectors due togrowing expectations of lower interest rates.

The U.S. Federal Reserve is set to conclude its monetarypolicy meeting on Wednesday, with investors looking for signalson whether a widely expected 25-basis-point rate cut from theU.S. central bank will be the start of an easing cycle.

"It's unlikely you'll see consolidation tomorrow if there'sa (Fed) cut. In the short term, people are emptying their books,taking profits and getting ready for holidays," said StephaneBarbier de la Serre, a macro strategist at Makor Capital Marketsin Geneva.

As evidence continues to build of the impact of a bruisingtrade war on global growth, expectations that major centralbanks will adopt accommodative policies have buoyed globalmarkets since a sharp fall in May.

A series of weak economic data from France, Germany and theeuro zone as a whole painted a meagre growth outlook, lendingsupport to doves among the European Central Bank.

A slide in the British pound on worries of a disorderlyBrexit failed to support the FTSE 100, which fell 0.5%.

Banks were a big drag on the index after the Bank of Englandsaid they will have to tell investors in 2021 if they can beclosed down without creating havoc in financialmarkets.

British Gas parent Centrica sank 19% to its lowestlevel in more than two decades as it slashed its dividend andsaid its chief executive would step down.

Imperial Brands PLC and British American Tobacco PLCslipped more than 4% after U.S. rival Altria Groupposted a tepid forecast for domestic cigarette volumes.

Ireland's main stock index ISEQ, which tends to fallon fears of a no-deal UK departure from the European Union, slid2.2%, its biggest one-day percentage drop since December 2018.

The latest company to become victim to trade disputes wasGermany's Bayer, which slipped 3.7% after theagricultural supplies company said its full-year earnings targethas become harder to reach.

Airline Lufthansa dropped 6% after posting adecline in second-quarter earnings and saying that the Europeanmarket was likely to remain challenging this year.(Reporting by Susan Mathew and Medha Singh in Bengaluru,additional reporting by Josephine Mason in London; editing byToby Davis)

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