Europe midday: Shares move ahead despite tariff uncertainity

(Sharecast News) - European shares moved into the positive territory on Monday as investors eyed the latest tariff threat outburst from US President Donald Trump against the so-called 'BRICS' nations and yet another extension to the pause in planned American import duties.

The pan-regional Stoxx 600 index was up 0.31% in early deals with major bourses ahead.

Trump threatened an extra 10% tariff on countries that aligned themselves with what he called the "Anti-American policies of BRICS", without specifying what his grievances were.

The bloc includes Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, United Arab Emirates, Ethiopia, Indonesia and Iran. It is currently meeting in Brazil and on Sunday issued a joint statement, warning against "unjustified unilateral protectionist measures, including the indiscriminate increase of reciprocal tariffs".

Trump also shifted his deadline for countries to agree a trade deal with the US to August 1 from July 9.

"A mixed affair for European equities this morning, with traders weighing up the implications of Donald Trump's decision to delay the reciprocal tariffs (against) set against the threat of a 10% BRICS tax," said Rostro analyst Joshua Mahony.

"Whether it is a case of him chickening out, he clearly does not want to implement the reciprocal tariffs in their original format, and thus what started as April, pushed to July, and now turns to August. There will be many that see this as weakening his hand as nations note his unwillingness to follow through on his threats. Nonetheless, this once again provides markets with a breather, bringing over three-weeks longer until tariffs kick in."

On the economics front, industrial production in Germany unexpectedly rose in May after slumping by its most in nearly a year the month before, according to data out on Monday from the Federal Statistical Office.

Price adjusted production in industry increase by 1.2% in May after seasonal and calendar adjustments, following a revised 1.6% slump in April, which was changed from the initial estimate of -1.4%, Destatis reported.

In the eurozone, retail sales dropped 0.7% month-on-month in May, according to Eurostat, following April's upwardly revised 0.3% growth rate, in line with market expectations.

May's decline was partly attributed to a decrease in food store sales volumes, with April's strong sales driven by good weather across the Continent.

Declines were seen in food, drinks and tobacco sales, non-food product sales, and automotive fuel sales.

In equity news, Shell fell as the energy giant lowered second-quarter gas output guidance and warned of weaker trading results.

French IT services firm Capgemini fell as it agreed to buy technology outsourcing company WNS for $3.3bn in cash to move into the AI market.

Reporting by Frank Prenesti for Sharecast.com