(Alliance News) - European equities struggled on Monday, with trade war worries, US growth concerns and underwhelming data from China keeping a lid on enthusiasm.
The FTSE 100 index traded down 36.71 points, 0.4%, at 8,643.17. The FTSE 250 was down 85.57 points, 0.4%, at 20,043.55, and the AIM All-Share was down 2.97 points, 0.4%, at 691.26.
The Cboe UK 100 was down 0.5% at 863.06, the Cboe UK 250 was down 0.5% at 17,429.43, and the Cboe Small Companies was down 1.6% at 15,374.82.
In Paris, the CAC 40 fell 0.3%, while the DAX 40 in Frankfurt declined 1.0%.
The pound rose to USD1.2926 early Monday afternoon from USD1.2920 at the time of the London equities close on Friday. The euro edged up slightly to USD1.0854 from USD1.0851. Against the yen, the dollar was at JPY147.00, down from JPY147.34.
President Donald Trump declined Sunday to rule out the possibility that the US might enter a recession this year.
"I hate to predict things like that," he told a Fox News interviewer when asked directly about a possible recession in 2025.
"There is a period of transition, because what we're doing is very big – we're bringing wealth back to America," he said, adding, "It takes a little time."
Trump's commerce secretary, Howard Lutnick, was more definitive when asked Sunday about the possibility of a recession.
"Absolutely not," he told NBC's "Meet the Press" when asked whether Americans should brace for a downturn.
Commerzbank analyst Ulrich Leuchtmann commented: "I had somehow imagined the promised dawn of the golden age in the US to be rather different. At the moment, it looks more like a recession. At least the US president no longer wants to rule it out. The interesting thing about this is not the forecast itself. I prefer to listen to our US economists (who, by the way, do not expect a US recession). What is interesting is that the US president is acknowledging that his policies are generating adjustment costs and that a dry spell is to be expected initially.
"This means that even if the president recognises that economic policy measures have a contractionary effect, it is not necessarily to be expected that he will cancel, postpone or water down these measures. The style in which he has pursued tariff policy so far may change; the hope that the tariff announcements were largely empty threats may prove to be false."
Canada's incoming prime minister Mark Carney struck a defiant note as the former central banker vowed to win US President Donald Trump's trade war, saying his country will "never" be part of the US.
Carney lost no time standing up for "the Canadian way of life" after the Liberal Party overwhelmingly elected him on Sunday to succeed Prime Minister Justin Trudeau.
"We didn't ask for this fight. But Canadians are always ready when someone else drops the gloves," Carney told party supporters in Ottawa.
"So the Americans, they should make no mistake, in trade as in hockey, Canada will win," he said.
"Canada never ever will be part of America in any way, shape or form," said the 59-year-old, who will take over from Trudeau in the coming days.
The Dow Jones Industrial Average is called to open 1.0% lower, the S&P 500 is called down 1.1% and the Nasdaq Composite 1.3% lower.
It has been a tough year so far for US tech stocks, AJ Bell analyst Dan Coatsworth commented.
"An astonishing USD1.57 trillion has been wiped off the value of the Magnificent Seven year-to-date. Six of the seven stocks have fallen in value, with Meta the only one to produce a positive return. Meta has become the lone ranger, representing a significant turning point for the tech collective," Coatsworth commented.
China's consumer price index fell 0.7% on-year in February, according to data released on Sunday by China's National Bureau of Statistics.
This is the first time in a year that the consumer price index has sunk to deflationary territory, and represented a steeper decline than the 0.4% forecast by a Bloomberg survey.
It also reversed the 0.5% uptick recorded in January, when a surge in spending during the Lunar New Year boosted inflation to its highest rate in months.
China has been battling falling consumption rates since the end of the pandemic. Adding to the pressure is US President Donald Trump's introduction of sweeping tariffs on Chinese products.
Pantheon Macroeconomics analyst Kelvin Lam commented: "Last month, consumer inflation was not only bolstered by the timing of the Lunar New Year but also by higher demand during the holiday season. While most market forecasters had factored that in, the downside surprise in February suggests that the deflationary pressure is more prevalent than generally thought."
Mining shares faded following the data. Antofagasta shed 3.2%, while Anglo American gave back 2.4%. Asia-focused insurer Prudential, and lender Standard Chartered, also with a Chinese exposure, declined 0.9% and 1.2%.
Utility shares rose, perhaps in a sign that investors are looking to more defensive stocks amid economic uncertainty.
Severn Trent added 2.9%, National Grid rose 2.3% and United Utilities climbed 1.9%. Pennon advanced 2.7%, also getting a boost from Citi raising the stock to 'buy' from 'neutral'.
Assura jumped 14%. It said it would be "minded to accept" a possible GBP1.61 billion cash bid from a US private equity consortium.
The care property investor and developer said the offer from Kohlberg Kravis Roberts & Co and Stonepeak Partners would value each share at 49.4 pence each.
Capital plunged 18%. The mining services company said it expects to report a decline in profit, as it books non-cash provisions for 2024 relating to historical VAT receivables and various laboratory assets in Mali. In addition, it said its chief executive has tendered his resignation.
It now predicts a net profit after tax in the range of USD18 million and USD20 million, a decline of up to 53% from USD38.5 million reported for 2023.
For this year, it predicts revenue in the range of USD300 million and USD320 million.
"Revenues will be H2 weighted given the ramp up of new projects, predominantly in our mining business, and margins will follow a similar weighting," it added.
Capital has accepted the resignation of CEO Peter Stokes. Stokes will stick around for a "brief transitional period".
Brent oil rose to USD70.63 a barrel midday Monday, from USD70.47 late Friday and gold slipped to USD2,898.12 an ounce from USD2,914.44.
By Eric Cunha, Alliance News news editor
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