European stocks tumble with EU tariff letter expected from White House

CNBC’s Sam Meredith has been reporting from the Norwegian capital Oslo this week, where strong Tesla sales are defying a wider European slump.

Check out his findings on why the Scandinavian country has emerged as a rare bright spot for the U.S. electric vehicle maker.

— Jenni Reid

In corporate news this morning, Italian luxury clothes maker Cucinelli posted a 10.7% increase in first half revenues, broadly in line with forecasts. Sales rose double digits in America and Asia, while the group confirmed its expectations for annual sales growth of about 10% this year and next.

Shares were around 0.1% lower in early deals.

The U.K. meanwhile said it will pump 163 million euros ($190.5 million) into satellite operator Eutelsat, an aspiring rival to Elon Musk’s Starlink. European governments view Eutelsat as a way to increase sovereign space capabilities and reduce European reliance on U.S. firms for satellite communications and defence.

The investment will allow the U.K. to maintain its stake when France makes a planned 750 million euro cash injection later this year, and brings the total recapitalisation 1.5 billion euros.

— James Tillotson

Sterling is trading lower after the U.K. economy unexpectedly shrank in May. The British pound was 0.2% lower against the U.S. dollar at $1.35 and 0.1% lower against the euro at 8:47 a.m. in London.

Some economists say the weak growth figures mean the Bank of England is now more likely to cut interest rates in August. Capital Economics’ Chief U.K. Economist Paul Dales forecast that U.K. GDP would rise by a “fairly subdued” 1% this year “due to the lingering drags from a weakening global economy and the rises in domestic taxes for UK businesses.”

— Jenni Reid

Sentiment has clearly soured in Europe after four days of solid gains, with all Stoxx 600 sectors except oil and gas and insurance opening in the red on Friday. The regional index was 0.46% lower at 8:10 a.m. in London.

British oil major BP on Friday flagged lower oil and gas sales in the second quarter and an after-tax impairment of up to $1.5 billion across its portfolio.

In a trading update released ahead of full second-quarter results on Aug. 5, the energy company said its gas and low-carbon sales will hit earnings by between $100 million and $300 million over the April-June stretch, also noting “average” results from the company’s gas trading arm.

Lower oil sales will meanwhile deliver a blow of between $600 million to $800 million over the period.

The firm said second-quarter results will also see “post-tax adjusting items relating to asset impairments in the range of $0.5 to 1.5 billion, attributable across the segments.”

In the oil products segment, BP said stronger realized refining margins would be in the range of $300 million to $500 million, and that “oil trading result is expected to be strong.”

The company also said its second-quarter upstream production is now expected to be higher than in the previous three-month period.

BP has been struggling to recalibrate its strategic direction amid underperformance in its share price compared with oil and gas peers, particularly in the U.S. Speculation has been mounting in recent months over whether the company could become an acquisition target.

— Ruxandra Iordache

The pan-European Stoxx 600 index notched a fourth daily gain on Thursday, but IG futures are pointing to a broadly negative open for major bourses on Friday.

The big news overnight is that U.S. President Donald Trump will lift tariffs on imports from Canada to 35% from Aug. 1, and warned that the duty might be increased if Ottawa retaliates. The rate is separate from sectoral tariffs placed on steel, aluminum and autos, and shortly copper.

Investors are also standing by in anticipation of the release of a letter from Trump in which he is expected to outline tariffs the European Union will face, after he told NBC News that he would be issuing tariffs “over the next couple of hours” to both the EU and Canada. 

— Jenni Reid, Michael Considine