[BENGALURU] European shares fell alongside other major global stock markets on Friday (Mar 21) on uncertainty over trade tensions and geopolitical conflicts, while travel and leisure stocks were hit after a fire led to the closure of Britain’s Heathrow Airport.
The pan-European Stoxx 600 was down 0.6 per cent in a third consecutive session of declines.
Britain’s Heathrow said flights would resume later on Friday after a fire knocked out its power supply and shut Europe’s busiest airport for the day, hitting airline and travel stocks.
Shares of British Airways parent IAG fell 1.9 per cent, Lufthansa was down 1.7 per cent and Ryanair dropped 2.3 per cent. The travel and leisure sector closed 1.6 per cent lower.
“The full extent of the impact will depend on how quickly the airport reopens and whether this is a one-off incident. The near-term impact for airlines and businesses reliant on cargo is likely significant but temporary,” said Sree Kochugovindan, senior research economist at aberdeen.
Basic resources miners were the biggest decliners, losing 2.6 per cent, as copper prices retreated from multi-month highs, while industrials were down 1.5 per cent.
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The European benchmark index closed 0.5 per cent higher on the week, after both houses of the German parliament passed reforms for a massive increase in government borrowing and a 500 billion euro (S$725.8 billion) fund to revive the economy.
“Berlin has taken over a more proactive role in Europe again, so there could be more defence spending coming in from other European Union countries and maybe also some spillover effects,” said Jochen Stanzl, chief market analyst at CMC Markets.
However, concerns about weaker growth, higher inflation due to global trade uncertainties and the Russia-Ukraine conflict kept a lid on risk appetite.
Major central banks have flagged uncertain growth outlooks against the backdrop of US President Donald Trump’s fluctuating trade policy and escalating trade tensions. The Federal Reserve and the Bank of England kept rates on hold at their meetings this week.
European Central Bank president Christine Lagarde warned on Thursday that a 25 per cent tariff imposed by the US would lower eurozone growth by about 0.3 percentage point in the first year, while retaliatory measures could increase this to about half a percentage point.
Additional, reciprocal US tariffs are expected from Apr 2.
Germany-based lubricant supplier Fuchs dropped 7.2 per cent with analysts pointing to its 2025 earnings before interest and taxes forecast, which fell slightly short of market expectations. REUTERS
