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European shares edged up on Thursday after the latest round of U.S.-China tariffs kicked in, hurting trade-sensitive autos stocks but boosting demand for sectors seen as more insulated from an escalating trade dispute.
The STOXX 600 was up 0.2 percent, buoyed by tech, healthcare, and consumer staples stocks - "defensives" which investors reach for as safer bets in times of uncertainty for their strong earnings growth and high dividend payouts.
The United States and China implemented 25 percent tariffs on $16 billion worth of each other's goods early on Thursday, bringing to $50 billion the value of imports subjected to tariffs on either side since early July, with more in the pipeline.
Autos stocks were the worst-performing for a second day. On Wednesday a surprise profit warning from tyre maker Continental sank the stock and hit the sector, already one of the worst impacted by tariff fears.
Continental fell a further 2.8 percent, bottom of the DAX, taking its losses to 15 percent since Wednesday's open.
Carmakers Daimler, BMW and Volkswagen fell 0.6 to 0.8 percent, while Valeo, Renault, Michelin and Peugeot were the biggest CAC 40 fallers.
Outside of trade war moves, shares in budget airline Ryanair jumped 4.7 percent to the top of the STOXX after the Irish pilots' union Forsa said it has reached an agreement in an ongoing labour dispute.
Danish medical equipment, supplies and distribution company Ambu sank more than 10 percent at the open after its third-quarter results, with traders saying earnings and revenues numbers had missed analysts' targets.
Gaming and casino software company Playtech rose 4.8 percent after its half-year profit loss came in smaller than expected. It said competition and tougher regulation in Asian markets had caused the fall in profits.
Swiss telecoms group Sunrise Communications rose 5 percent after it increased its guidance for full-year 2018 EBITDA.
Building materials firm CRH also gained 3.7 percent after reporting first-half margins held steady and striking a positive tone for earnings in the second half of the year.
China's commerce ministry said on Thursday that Beijing will have to continue to fight back against the latest implementation of U.S. tariffs on $16 billion of Chinese goods.China will file a complaint with the World Trade Organization (WTO) against the U.S. action, the ministry also said in a statement on its website.The latest round of U.S., Chinese import tariffs on each other's goods took effect as of 0401 GMT on Thursday. 'China is aiming to use pressure to affect elections': Taiwan presidentUS, China to resume trade talks in Washington amid low expectationsDollar falls after Trump criticizes FedUS tariffs to have negative impact on economy: Survey
China says will continue to fight back against US tariffs
Turkey's presidential spokesman has blasted Washington for disregarding the legal process in the case of an American pastor facing terrorism-related charges. In a written statement to Reuters late Wednesday, Ibrahim Kalın said: “There is the rule of law in Turkey, and the Andrew Brunson case is a legal issue. There is an ongoing legal process related to this individual. “It goes without saying that we find unacceptable the disregard of the legal process by the United States, which has been making certain demands.”Someone being a priest or a clergyman is not enough to make a person innocent, Kalın said."The judiciary is the decision-maker, and everybody, including the U.S., has to respect the decision of the Turkish judiciary. Just as it has so far, this rule will continue to hold."His remarks came after U.S. National Security Adviser John Bolton earlier told Reuters that Turkey made a “big mistake” in not releasing Brunson. Turkey and the U.S. are facing rocky relations following Washington’s imposition of sanctions on two Cabinet ministers for not releasing pastor Andrew Brunson, who faces terrorism-related charges in Turkey. On Aug. 10, U.S. President Donald Trump ramped up his attack on Turkey by doubling U.S. tariffs on Turkish aluminum and steel imports. In retaliation, Turkey raised tariffs on several U.S.-origin products, including alcohol and tobacco products and cars.Former German minister slams Trump’s Turkey policyHalkbank case result of 'FETÖ plot'Moving to another thorn in Turkish-U.S. ties, Kalın said that everybody knows that Mehmet Hakan Atilla, a former executive at Turkish state-owned lender Halkbank, was unjustly imprisoned by the U.S. as the result of a “plot” by the Fetullah Terrorist Organization (FETÖ), the group behind the 2016 defeated coup in Turkey.Atilla was sentenced this May to 32 months in prison for violating the sanctions on Iran.“It is unacceptable that certain baseless and false allegations are made against Halkbank to weaken this public bank,” Kalın said.“It seems that the purpose of those steps is to discredit respectable institutions and persons and to punish them unjustly rather than discover the truth," he said, adding that Turkey is "extremely disturbed by this process.”US pastor's lawyer plans appeal to Turkish constitutional courtUS sanctions hurt NATO alliance, says Turkish FMBolton’s ‘desperate’ remarks Bolton had said that he was skeptical of Qatar’s pledge last week of $15 billion in investment support for Turkey, claiming this is “utterly insufficient to have an impact on Turkey’s economy.”His remarks on Turkey’s economic condition and Qatar’s investment plans point to a “more desperate situation,” Kalın said. “His statement is proof that the Trump administration is targeting a NATO ally as part of an economic war.”Kalın also mentioned that the current U.S. administration has similar disputes with Mexico, Canada, Cuba, China, Russia, Iran, the EU, and Germany. “The Trump administration has ... established that it intends to use trade, tariffs, and sanctions to start a global trade war,” he said. “So, there is a global problem. The problem between Turkey and the U.S. have appeared as part of the problems that the Trump administration has with the world,” Kalın added.“Such political, judicial and economic attitudes are at odds with the soul of the alliance. These are also against NATO’s fundamental rules.”After Trump attack on Russia ties, Merkel eyes Azeri gas'Turkey will not be silent'“Turkey has no intention of starting an economic war with any party. It cannot, however, be expected to keep silent in the face of attacks on its economy and judiciary,” he said.Ankara will work with the rest of the world against “restrictive and punitive” approaches and protect the nation's interests in all areas, he added.Kalın welcomed recent statements supporting Turkey, saying that they show Turkey is on the right path.“Qatar’s pledge of $15 billions in investment in Turkey relieved the markets. We appreciate Qatar’s attitude. From now on Turkish-Qatari relations will continue to strengthen at all levels,” he said.Stressing the importance of statements by Germany, France, Italy, Russia, China, and Iran in support of Turkey, Kalın praised the steps fighting back the attacks on the Turkish currency as effective.The Treasury and Finance Ministry and related institutions will continue to take measures to help the economy, he added.US, China to resume trade talks in Washington amid low expectations
US disregard of legal process unacceptable: presidential aide