Source: Sharecast
"While hopes of an EU-US trade deal have helped to support Europe this week, that mood appeared to be weakening on Friday. Profit warnings from several European firms have meant that sentiment has remained under pressure, though some buying at the lows has been seen," said Chris Beauchamp, chief market analyst at IG.
As a result, the Stoxx 600 finished 0.3% lower at 549.95, with small gains in Paris and Milan outweighed by losses in London, Frankfurt, Madrid and Zurich. The Stoxx 600 finished Thursday's session at 551.55, its highest close since 10 July.
A number of blue chips across the continent disappointed investors with updates during the session, with many citing the negative impact of US tariffs on business.
With a deadline of August 1 looming for the EU to strike a trade deal with the US or face 30% tariffs, traders are looking for any signs of corporate stress to gauge the economic impact on equities.
Speculation has increased over recent days that officials from both sides are nearing a deal to agree on 15% tariffs on EU imports into the US, though uncertainty remains high. At the same time, the EU is also said to be preparing contingency measures in case a deal can't be struck, including export and import restrictions.
Economic data was thin on the ground in Europe on Friday, with only major release being the Ifo German business confidence survey, which improved less than expected. The business climate index rose to 88.6 in July from 88.4 in June, coming in below expectations for a reading of 89.0.
VW, Michelin and Puma feeling the tariff impact
German automotive giant Volkswagen pushed 2% higher by the close but fell early on after lowering full-year guidance. The news came along second-quarter results which showed operating profits had fallen 29% year-on-year, principally due to elevated costs stemming from Trump's tariffs.
Car parts maker Michelin fell 5% after posting a bigger-than-expected 28% slump in first-half net income, blaming the threat of tariffs for a sharp decline in North and Central America. However, the company still retained full year guidance.
Puma shares tanked 15% after the German sports apparel brand slashed its outlook for the full year – also citing the impact from US tariffs. The company overnight said it now expected to make an operating loss in 2025 and added that annual sales would fall by a low double digit percentage, compared with previous guidance of growth.
In Paris, Valeo slumped 6% after the French car parts supplier cut its full-year sales outlook due to a weaker USD and tough auto market.
In more positive news, Eni edged higher after the Italian energy giant announced a €1.5bn buyback plan and raised a number of full-year targets, despite FX and commodity price headwinds.
Meanwhile, French spirits group Rémy Cointreau jumped 7% after upping its profit targets for the full year, predicting less of a hit from trade tariffs than previously expected.
