European shares rise as Trump touts auto-related tariff break; LVMH plunges
April 15 (Reuters) – European shares rose on Tuesday as investors digested fast-changing U.S. tariff plans, while shares of LVMH slumped after disappointing first-quarter revenue from the world’s largest luxury group underscored the damage caused by the trade war.
The pan-European STOXX 600 (.STOXX), opens new tab climbed nearly 1%, as of 0802 GMT, with most regional indexes in positive territory —except for France’s CAC 40 (.FCHI), opens new tab, which dipped 0.1%. The decline was dragged down by a 7.7% drop in LVMH (LVMH.PA), opens new tab, set for its steepest fall since March 2020, if losses hold.
The bellwether for the luxury sector said shoppers in the United States cut spending on beauty products and drinks, while sales in China stayed weak during the quarter.
Peers including Cartier owner Richemont (CFR.S), opens new tab, Gucci parent Kering (PRTP.PA), opens new tab and Moncler (MONC.MI), opens new tab fell between 1.4% and 2.6%. French cosmetics giant L’Oreal (OREP.PA), opens new tab and Spanish beauty company Puig (PUIGb.MC), opens new tab fell 2.5% and 2.7%, respectively.
But stock indexes in Germany (.GDAXI), opens new tab, Spain (.IBEX), opens new tab, and the UK (.FTSE), opens new tab rose between 0.6% and 0.7%.
The auto and parts index (.SXAP), opens new tab climbed 2.2%, leading gains among sectors, after U.S. President Donald Trump said he was considering a modification to the 25% tariffs imposed on foreign auto and auto parts imports from Mexico, Canada and other countries.
“There is a positive tone because the market is digesting a temporary carve-out in auto tariffs that is being talked about and is also still reacting to the relief that the electronics sector received, even if it’s temporary,” said Georgios Leontaris, chief investment officer for Switzerland and EMEA, HSBC Global Private Banking and Wealth.
“It certainly de-escalates, at least for now, coupled with a 90-day pause in some of the reciprocal tariffs.”
Weeks of back-and-forth over tariffs have rattled global markets, dragging the benchmark index down 11.2% from its record-closing high as of the last session.
Trump first announced reciprocal tariffs around the world in early April before suddenly dialling back those duties last week for a 90-day period, whip-sawing financial markets. However, even with the 90-day reprieve, the European Union is still being hit by a broad 10% tariff, not to mention higher rates on steel, aluminium and cars.
BE Semiconductor Industries (BESI) (BESI.AS), opens new tab jumped 6.8% after U.S.-based computer chip equipment supplier Applied Materials (AMAT.O), opens new tab bought a 9% stake in the Dutch semiconductor advanced packaging firm.
Ericsson (ERICb.ST), opens new tab rose 6.9% after the telecoms equipment maker reported much better-than-expected first-quarter core earnings.
Shares in Fugro (FUGR.AS), opens new tab fell 14.6% after the Dutch geological data specialist cut its first-quarter revenue and profit outlook.
Investors now await the European Central Bank’s policy meeting on Thursday, with markets widely anticipating a 25-basis-point rate cut.