UPDATE 2-European stocks stumped as U.S. threatens tariffs on Mexico
* STOXX 600 posts monthly loss of 5.7%; worst since Jan, 2016
* Firms with Mexico exposure hit, Spanish lenders decline
* Auto sector drops, sector index plumbs near 5-month closing low
* Utilities, real estate stocks en vogue; investors rush for cover (Recasts throughout, adds quote and graphic, updates to close)
By Aaron Saldanha
May 31 (Reuters) - European stocks tanked on Friday, with auto-makers hit especially hard, after U.S. President Donald Trump widened the scope of his trade wars by threatening to impose new tariffs on Mexican imports. exited riskier equity positions and moved to safer ground, sending European defensive stocks higher and yields on German bonds to record lows. GVD/EUR
The pan-Europe STOXX 600 .STOXX fell 0.8% on the day to close out May with a 5.7% slide, its worst monthly loss since January 2016.
"President Donald Trump is playing a Game of Thrones with both foreign and domestic adversaries," Ed Yardeni, president and chief investment strategist at Yardeni Research, wrote in a note.
"Since he is the president of the world's greatest economic and military power, he claimed that he will consummate lots of deals with them that will greatly benefit the U.S. in short order," said Yardeni, adding that "the results have been mostly disappointing so far."
Germany's trade-sensitive DAX .GDAXI fell 1.5% to an about five-month closing low. French stocks .FCHI slid 0.8%, matching their London peers .FTSE .
Trump's move hit European stocks exposed to Latin America's second largest economy. Madrid-listed banks Santander SAN.MC , Sabadell SABE.MC and Bilbao BBVA.MC , all of whom have a sizable presence in Mexico, slid between 2.4% and 4.1%.
Carmakers and their suppliers .SXAP shed 2%, while Fiat Chrysler FCHA.MI and Volkswagen VOWG_p.DE - which import cars to the U.S. from Mexican plants - shed 4.8% and 2.6% respectively.
During May, tariff-exposed auto-stocks have greatly underperformed the STOXX 600, which itself has lagged the S&P 500 .SPX .
Milan-listed stocks .FTMIB fell 0.7%, with local banks .FTIT8300 matching that decline. The country's lenders were hit by the Bank of Italy warning that public debt could rise more than forecast this year. Wirecard WDIG.DE tumbled 8.7% after a Handelsblatt report on an investigation by authorities into fraudulent transactions in the sector. .SX6P edged 0.2% higher, while real estate stocks .SX86P - a refuge for investors at times of tariff turmoil - rose 0.6%.
Athens-traded stocks .ATG provided a rare spot of optimism on the day, rising 1.5% to a near 13-month peak. The index posted a 7.4% gain for May, aided by news of snap elections being called. Performance of STOXX 600 Auto and parts sub-index against STOXX 600 and S&P 500
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or