European Markets Show Mixed Signals Amid Trump Policies and Local Data

The European stock markets exhibited varied movements on Tuesday, remaining close to stability as investors weighed local economic data against the potential implications of Donald Trump's recent policy announcements. On his first day in office, Trump implemented new tariffs targeting Canada and Mexico and signed executive orders to prioritize fossil fuel exploration in the United States.

By 7:15 AM Brasília time, the pan-European Stoxx 600 index recorded a modest gain of 0.20%, reaching 524.90 points. The European automotive sector, renewable energy companies, and commodity-related stocks were notably affected by the onset of Trump's administration and the series of executive actions taken.

In specific regional performances, the Ibex 35 index in Madrid fell by 0.36%, while Portugal's PSI 20 index dropped 0.62%. In contrast, Paris's CAC 40 saw a slight increase of 0.23%. A significant decline was observed for the Danish company Orsted, which plummeted by 15% in Copenhagen after announcing losses of 12.1 billion Danish crowns (approximately $1.7 billion) tied to its U.S. wind turbine projects. This drop followed Trump's announcement halting federal wind energy leasing and requiring new permits for exploration efforts.

Additionally, the automotive giants Stellantis and Volkswagen experienced declines of 1.07% and 0.31%, respectively, due to concerns regarding diminished competitiveness stemming from the newly imposed tariffs, overshadowing positive growth in new car registrations within the European Union for 2024.

In Milan, the FTSE MIB index decreased by 0.20%, while Frankfurt's DAX index showed a negligible decline of 0.04%, reflecting the worsening economic expectations for Germany in January. Overall, the European market displayed volatility, struggling to find a definitive direction. Investors are also closely monitoring upcoming earnings reports in the United States and the discussions at the World Economic Forum in Davos.

In London, the FTSE 100 index rose by 0.11%, although this was tempered by declines in shares of Glencore (down 0.88%), Anglo American (down 1.55%), and Antofagasta (down 0.96%), amid significant drops in metal commodities. The slight increase in the British market coincided with a rise in the unemployment rate in the UK to 4.4% for the quarter ending in November, which has reignited expectations of potential interest rate cuts by the Bank of England, overshadowing the recent acceleration in wage growth.