European Shares Slide On Tariff Worries; FTSE 100 Rises As Pound Sinks

(RTTNews) - European shares edged lower on Thursday amid light trading volumes due to a market holiday in the U.S.

A cautious undertone prevailed as government bond yields surged on concerns about potential tariffs under Trump's presidency and prospects of fewer interest-rate cuts by the Federal Reserve this year.

In economic releases, German industrial output increased 1.5 percent on a monthly basis in November, in contrast to the revised 0.4 percent decrease in October, provision data from Destatis revealed today. Output was expected to grow moderately by 0.5 percent.

German exports logged a monthly growth of 2.1 percent in November after October's 2.9 percent decrease while the decline in imports worsened to 3.3 percent from 0.3 percent in October, separate set of data revealed.

The European Central Bank should keep lowering borrowing costs at every meeting as long as the retreat in inflation matches its projections, ECB policymaker Francois Villeroy said in a speech on Wednesday.

The pan European STOXX 600 was marginally lower at 513.26.

The German DAX and France's CAC 40 were also moving lower while the U.K.'s FTSE 100 rose half a percent as the pound fell to its lowest level for nine months on worries about rising borrowing costs and stagflation threat.

U.K. retailers were in focus, with Tesco falling nearly 2 percent despite posting strong results over the festive period.

Marks & Spencer plunged 6 percent after warning over cost and economic headwinds. Discount retailer B&M European Value Retail plummeted 10 percent after narrowing its annual core profit forecast.

Energy giant BP Plc gained 1 percent after it secured a contract to operate ONGC's Mumbai High oil and gas fields.