Hang Seng Reverses Early Gains to End Lower

Miners Rio Tinto and Antofagasta are among the FTSE 100's biggest gainers in morning European trade after their production updates. Rio Tinto trades 2% higher at 4437.5 pence a share after it reported the highest second-quarter output from its Australian iron-ore mines since 2018. However, it flagged that it expects round $300 million of gross costs from U.S. tariffs on its Canadian aluminum exports. Antofagasta's shares rise 2.5% at 1886 pence after the Copper miner stuck to its full-year guidance after costs fell and production rose at its Los Pelambres and Centinela mines in the second quarter.(adam.whittaker@wsj.com)

The CAC 40 edged lower to trade around 7,756 on Wednesday, marking its fourth consecutive session of losses, as investors weighed a fresh round of corporate earnings and news, alongside US tariff developments.

Renault slumped 16% to its lowest level since February 2024 after issuing a downgrade to its full-year outlook and reporting preliminary first-half results that fell short of expectations.

Fellow automaker Stellantis NV also fell 3.9% after announcing it would halt development of its hydrogen fuel-cell technology.

Other notable underperformers included Edenred (-2.9%), Kering (-2.8%), and STMicroelectronics (-1.9%).

Conversely, Essilor rose 1.1%, Sanofi gained 0.9%, and Publicis added 0.7%, all showing resilience.

Meanwhile, trade tensions continued to weigh on market sentiment, following US President Trump's warning that tariffs on pharmaceuticals could be introduced by the end of the month, along with suggestions that levies on semiconductors may follow.

The FTSE MIB fell to around 39,790 on Wednesday, extending losses from the previous session and tracking declines across regional peers as investors focused on corporate earnings.

Iveco Group dropped over 3%, echoing a sharp 17% plunge in its French counterpart Renault.

STMicroelectronics also declined nearly 2% after ASML issued weaker-than-expected revenue guidance for Q3 and narrowed its own 2025 outlook.

Other notable laggards included Buzzi Unicem (-1.2%), Tenaris (-0.7%), and Leonardo (-0.6%).

Meanwhile, trade tensions remained in focus after President Trump signaled potential tariffs on pharmaceuticals by the end of the month and hinted that levies on semiconductors could follow.

On the domestic front, traders await Italy’s final June inflation reading and May trade balance data due later today.

Chinese stocks closed lower on Wednesday following two days of mixed endings as investors express worry about trade uncertainties with the US.

The Shanghai Composite Index, the main gauge of Chinese stocks, fell marginally by 1.22 points to 3,503.78. The Shenzhen Component Index slipped 0.2% or by 23.75 points to 10,720.81.

US President Donald Trump said his country would be battling China "in a very friendly fashion," Reuters reported Wednesday. Trump made the remarks after signing a trade agreement with Indonesia.

"In our base case, we assume that the U.S. tariff rate on China would stay unchanged at 30% - but the recent escalation of U.S. tariffs on other economies is likely to further dampen global trade momentum," Reuters quoted Morgan Stanley analysts as saying on Wednesday.

China's export performance could hang in the balance after the US started introducing a dual-level tariff structure on Vietnamese imports: 20% for direct imports and 40% for what the US deems as Chinese transshipments, Reuters reported, citing the analysts.

In the corporate front, Smartsens Technology forecast a surge of up to 180% in first-half profit following higher shipments of 50-megapixel smartphone sensors. Shares in the eCMOS image sensor chip designer closed 5% lower.

Frankfurt's DAX edged down toward the 24,000 mark on Wednesday, on track for the fifth straight day of losses, as traders weighed more tariff threats and disappointing corporate updates, including from ASML and Renault.

President Donald Trump said on Tuesday he was likely to impose tariffs on pharmaceuticals by the end of the month and that levies on semiconductors could come soon.

Among individual stocks, Infineon Technologies led the losses, down 1.6%, followed by Daimler Truck Holding, Volkswagen and Siemens Energy.

The FTSE 100 traded flat on Wednesday as gains in miners offset losses in retailers and pharma stocks.

Rio Tinto led the index, rising over 2%, after it advanced the timeline for shipments from its Simandou iron ore project in Guinea and reported a recovery in iron ore exports in Q2 following cyclone disruptions.

The update came as Simon Trott, head of Rio's iron ore division, was named the company’s new CEO. Rio also noted that U.S. tariffs on Canadian aluminium increased costs by $300 million in H1.

Other miners like Antofagasta (+1.9%) and Fresnillo (+1.2%) rose on stronger iron ore and gold prices.

Oil majors Shell and BP edged higher as well.

In contrast, B&M shares extended Tuesday’s losses, down 2.5%, and Barratt slipped 1.6% after both stocks slumped following weak updates.

AstraZeneca dropped over 1% after its AL amyloidosis drug failed a key trial.

Meanwhile, UK inflation came in at 3.6% in June, above forecasts, raising concerns over interest rate expectations.