European stocks tumble over US push for Greenland

European stock markets and US stock futures tumbled as investors remain wary of the heightening tensions between the US and Europe after President Donald Trump threatened to impose tariffs on a raft of countries in his push to take control of Greenland, with luxury stocks such as LVMH Moet Hennessy Louis Vuitton and Kering among the hardest hit as analysts pointed out their exposure to US exports.

With Wall Street was closed for the Martin Luther King Dr Day public holiday, gold remained a favoured haven as the precious metal extended its gains, although Australian futures are to a soft start for the resources-heavy S&P/ASX 200 index.

Chinese economic growth was broadly in line with expectations yesterday, although a slump in the nation’s birth rate knocked infant formula company a2 Milk Co, which had to pause trading on the ASX when it got a ‘please explain’ not from the stock market operator.

And locally, the BNZ-BusinessNZ performance of services index will provide the latest gauge of New Zealand’s economic recovery, with the Reserve Bank’s Kiwi GDP model indicating growth of 0.9% in the December period.

All is quiet

Wall Street was closed for the Martin Luther King Jr public holiday, putting European markets in the spotlight after US President Donald Trump upped the ante on its trans-Atlantic partner over the weekend by threatening tariffs on a raft of countries if they don’t support his bid to buy Greenland.

“As markets opened for the new week there was keen interest in the response to President Trump’s weekend threat of new tariffs on eight European countries to persuade them to give up Greenland, alongside chatter that French President Macron was urging the EU to activate the powerful anti-coercion instrument, seen as a bazooka to hit US trade and investment into the region,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “In the event, price action has been well contained so far, although US markets are closed for a holiday.”

S&P 500 futures were down 0.9%, while the UK’s FTSE 100 fell 0.4%, Germany’s DAX 30 dropped 1.3% and France’s CAC 40 sank 1.8%, with investors fretting over how European leaders will respond after French President Emmanuel Macron pushed for the use of anti-coercion tools that would restrict imports into the bloc.

France’s luxury powerhouses LVMH and Kering were among the hardest hit, with both shedding more than 4%, as analysts pointed to their exposure to US exports. LVMH was also downgraded by Morgan Stanley analysts.

Growing but slowing

The luxury firms have often tracked the ebbs and flows of China’s economy, which grew 5% in 2025, meeting the government’s target while continuing to lose momentum amid sluggish consumer spending and business investment.

A slump in Chinese birth rates to its lowest level since 1949 knocked a2 Milk Co, which tumbled 11% on the NZX yesterday and paused trading on the ASX when the stock market operator issued a ‘please explain’ note on the sharp slump in its share price.

Precious metals continued to be the favoured haven amid the heightened uncertainty, with gold futures up 1.9% at US$4,4682 an ounce at 7am in Auckland, having gained 7.9% so far this year.

The rally in precious metals prices has underpinned gains for mining stocks, which account for a large portion of Australia’s stock exchange, although futures are pointing to a 0.4% decline for the ASX200 when trading opens across the Tasman.

Meanwhile, the kiwi dollar remained supported, rising to 57.95 US cents at 7am in Auckland from 57.70 cents yesterday, having hit its highest level since December.

Local data today include the BNZ-BusinessNZ performance of services index, which has been slower to show signs of the country’s economic recovery than other indicators.

Reporting by Paul McBeth. Image from ALEXANDRE LALLEMAND on Unsplash.