European stocks dip following two-day rally as investors eye US-EU trade talks

European shares dipped on Wednesday, following a two-day relief rally after US President Donald Trump delayed tariffs on the EU, with investors returning to a wait-and-see approach on trade talks.

The pan-European Stoxx 600 index ended the session down 0.6 per cent.

Dublin

The Iseq All-Share index ended the session down 0.4 per cent at 11,367.46. Banking stocks were mixed, as investors upped bets on the European Central Bank (ECB) cutting interest rates next week. AIB lost almost 1 per cent to €6.70. However, Bank of Ireland managed to eke out a 0.2 per cent gain, to €11.80.

Still, house building stocks advanced, with Cairn Homes rising 2 per cent to €2.29 and Glenveagh Properties moving 0.9 per cent higher to €1.80.

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Ryanair lost 0.5 per cent to €23.72.

London

The FTSE 100 in London fell 0.6 per cent. Retail stocks, such as Sainsbury’s, were among the notable fallers as industry data showed another jump in food inflation in recent weeks.

In company news, home improvement giant Kingfisher was lower at the end of trading despite a rise in sales.

The B&Q owner said the chain was boosted by rocketing demand for its garden and seasonal ranges in the UK due to warm weather, although trading challenges remained across its operations in France. Kingfisher shares finished down 3.5 per cent on Wednesday.

Elsewhere, Pets at Home added 1.6 per cent as growth in its vet arm continued to boost revenues and profits. It helped the UK’s largest pet retailer to offset a “subdued” market for pet products this year as conditions continue to “normalise” following a boom in puppy and kitten ownership during the Covid pandemic.

Of Irish interest, Dublin-based, but London-listed C & C Group moved 3.2 per cent higher after progress in its turnaround plan helped drive a recovery in profits.

Europe

European carmakers rose 0.7 per cent on the whole, following reports on Tuesday that EU policymakers had asked the region’s leading companies to provide details of their US investment plans.

German automakers including BMW, Mercedes-Benz and Volkswagen are in talks with Washington on a possible import tariff deal.

Germany’s main stock index retreated 0.8 per cent after hitting a record high earlier in the session, while the mid-caps index hit its highest since April 2022.

In France, the CAC 40 index closed 0.5 per cent lower, reversing earlier gains after gross domestic product figures showed slight growth in the first quarter, as expected.

Swedish medical equipment marker Elekta shares jumped 5.9 per cent after beating estimates for fourth-quarter sales.

Stellantis dipped 2.2 per cent. The Jeep-maker named insider Antonio Filosa as its top boss.

New York

Wall Street’s main indexes were lower in early afternoon trading, as investors awaited AI bellwether Nvidia’s results and minutes from the US Federal Reserve’s last policy meeting.

Most megacap and growth stocks shed initial gains and were mostly flat.

Salesforce was dipped and is also scheduled to report earnings after the bell.

All three main Wall Street indexes soared in the previous session after Mr Trump backed down over the weekend from his threat of 50 per cent tariffs on imports from the EU.

Yields on long-dated US Government bonds were slightly higher after scaling multi-month highs last week. Global bond markets have been in the spotlight over concerns about fiscal sustainability in big economies including the United States and Japan.

In earnings, Michael Kors-owner Capri Holdings advanced after its fourth-quarter revenue beat analyst estimates.

Shares of sportswear retailer Dick’s Sporting Goods gained after its first-quarter results beat estimates.

Cybersecurity firm Okta flagged risks related to the uncertain economic environment but stuck to its full-year outlook. Its shares dropped.