Europe’s main stock gauge struggled to get out of a tight range in Tuesday trading, dogged by a deepening U.S.-China trade spat. German retailer Zalando SE was the worst performer of the day, while Swiss chemicals firm Clariant AG SA rallied.
What are markets doing?
Germany’s DAX 30 /zigman2/quotes/210597999/delayed DX:DAX +0.79% closed 0.5% higher at 12,157.67, while France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.68% added 0.3% to 5,363.79. The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.86% ended the session little changed in negative territory at 7,300.23.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.0939% was changing hands at $1.1691 from $1.1685 late Monday in New York, while the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.2670% was slightly stronger at $1.3165 from $1.3156.
What is driving the market?
Traders were distracted by fresh trade tensions after U.S. President Donald Trump said late Monday he will impose another 10% tariffs on $200 billion in Chinese imports to take effect next week, with that percentage due to double by 2019. China in response announced it would impose retaliatory tariffs on $60 billion of U.S. goods..
U.S. stocks were modestly higher on Tuesday following Monday’s trade-tension inspired selloff, with the energy sector leading the gainers thanks to a rally in crude oil . The S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.05% is up 8.8% year-to-date, while the Stoxx Europe 600 has lagged behind with a 2.7% decline over the same period, according to FactSet.
Volkswagen AG /zigman2/quotes/204309985/delayed DE:VOW3 +0.06% jumped 2.7%. The auto maker announced Monday that it will build 10 million electric cars based on its modular electrification platform. Those shares shook off news that the EU’s antitrust body has opened a formal probe into “possible collusion” over emissions among big German auto makers big car makers—BMW AG /zigman2/quotes/209548467/delayed DE:BMW -0.38% , Daimler /zigman2/quotes/205332368/delayed DE:DAI +0.74% , Volkswagen and its Audi AG /zigman2/quotes/207972355/delayed DE:NSU +0.63% unit.
Nevertheless, all three car producers closed higher, with BMW finishing up 0.2%, Daimler up 0.7% and Audi ending the session up 1.9%.
Clariant /zigman2/quotes/208575719/delayed CH:CLN +0.49% shot up nearly 8% after the chemicals maker upgraded guidance and said it had reached agreement with Saudi Basic Industries Corp. to buy a quarter of the company.
Zalando /zigman2/quotes/209028521/delayed DE:ZAL +1.79% finished more than 13% down after the German online retailer cut its 2018 outlook for the second time since August.