Europe midday: Shares extend losses on tariff worries

(Sharecast News) - European shares opened extended losses on Wednesday as the spectre of high US tariffs threatened by President-elect Donald Trump dampened sentiment and prompted warnings from central bankers of the impact on growth and inflation. The pan-European Stoxx 600 index was down 0.58% at 504 points with all major bourses in the red.

A bellicose Trump has threatened to slap large tariffs on China, Canada and Mexico as part of his anti-immigrant agenda, sparking fears that the inflationary impact could see interest rates being cut at a slower pace.

Bank of England deputy governor Clare Lombardelli warned the proposed tariffs would pose a risk to global economic growth.

"I don't want to speculate on the specifics but we know barriers to trade are not a good thing, whether they are tariffs or regulatory or others," she told the Financial Times newspaper.

"Whether you are an economic historian, an economic theorist or a data-driven economist, the impact is clear in terms of its direction. In terms of its size, that depends on the circumstances."

Markets fell on Tuesday after the populist Trump said he would impose 25% tariffs on Canada and Mexico, and an extra 10% on China.

Hargreaves Lansdown analyst Susannah Streeter said investors were still assessing the potential ramifications of Trump's tariff plans.

"There is speculation that the bruising duties Donald Trump has outlined are his gauntlet thrown down to spark the start of negotiations rather than a considered policy map. Stocks on Wall Street reached fresh ground, as investors shrugged off concerns that his plans will spark new trade wars around the world, expecting in reality the measures will be toned down significantly."

France's CAC 40 fell more than 1% after data showed consumer confidence fell to its lowest level in five months in November with households turning more negative about their living standards and personal finances.

The INSEE consumer confidence index declined to 89.9 this month from a revised 93.4 in October, falling further below the long-term historic average of 100.

In equity news, Grifols slumped 11% on a report that Canadian investment fund Brookfield is considering dropping its plan to take over the Spanish pharma firm.

Shipping firm Frontline also dived after reporting a sharp fall in quarterly earnings.

Shares in easyJet gained as the budget airline posted a 34% rise in annual profits.

Aston Martin hit the brakes after yet another profit warning.

Reporting by Frank Prenesti for Sharecast.com