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Europe close: Stocks end lower as ECB's Lagarde warns of trade tariff impact

Thu 20 March 2025 16:07 | A A A

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(Sharecast News) - European stock markets dropped into the red on Thursday, as concerns about a fragile global economy and geopolitical tensions hit sentiment.

Driving that point home, European Central bank boss, Christine Lagarde, told lawmakers in Brussels that the combination of US tariffs on European goods and the bloc's retaliatory measures would subtract half a percentage point from euro area GDP growth in the first year, even as the inflation outlook became more uncertain.

The Stoxx 600 traded 0.43% lower to 552.98, with the German Dax off by 1.24% to 22,999.15 alongside.

Italy's FTSE Mib gave back 1.32% to 39,188.17.

Market sentiment had initially lifted overnight on the back of dovish signals from Federal Reserve chair Jerome Powell on Wednesday evening.

News of rising conflict between Ukraine and Russia was doing the rounds, after Ukraine allegedly attacked Russia's Engels strategic bomber base with drones. The base, which houses Russia's nuclear-capable White Swan bombers, saw a massive explosion and widespread fires, according to reports.

Elsewhere in Europe, Switzerland's central bank reduced its policy interest rate by 25 basis points to 0.25% on Thursday, marking its fifth consecutive cut since March 2024.

The SNB anticipated moderate global growth in the coming quarters, but also acknowledged heightened uncertainties, particularly concerning trade and geopolitical developments.

In equity news, German shipping giant Hapag-Lloyd fell 8% after reporting a 19% slump in annual group profit.

French food services company Sodexo dropped 17% after cutting growth forecasts on the back of slower growth in the North America.

UK-listed Prudential rose 2% after hiking its dividend and accelerating its share buyback plan as it reported 10% annual profit growth, with financial results in line with group guidance.

In economic news, German producer prices were 0.7% higher year-on-year in February, up from January's 0.5% rise, but below the 1% increase analysts had been expecting.

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