Portugal Colonial - Stock markets find little cheer as Trump targets champagne

Worries about a potential US government shutdown at the weekend also weighed on sentiment.

Trump threatened Thursday to impose 200-percent tariffs on wine, champagne and other alcoholic products from France and other European Union countries in retaliation against the bloc's planned levies on US-produced whiskey, part of the EU's reprisals for US tariffs on steel and aluminium imports.

Trump has launched trade wars against competitors and partners alike since taking office, wielding tariffs as a tool to pressure countries on commerce and other policy issues.

Shares in luxury giant LVMH, which owns several champagne houses including Dom Perignon and Hennessy cognac, fell 1.4 percent in afternoon trading.

Shares in French drinks group Pernod Ricard, which owns two champagne houses and Jameson Irish Whiskey, tumbled 3.4 percent.

The Paris stock exchange was 0.4 percent lower in afternoon trading and Frankfurt shed 0.5 percent. London bucked the trend, edging less than a tenth of a percentage point higher.

Wall Street opened lower with the Dow giving up 0.3 percent.

The drop came despite data showing US producer inflation was flat in February, defying expectations of an uptick as Trump's tariff hikes targeting Chinese goods took effect.

David Morrison, senior market analyst at Trade Nation, said cool inflation data would normally spark a rally, but that investors remain wary.

"The problem is President Trump's tariff strategy, which appears indiscriminate, poorly targeted and inconsistent," he said.

"It's proving difficult to fathom the endgame. Is it about border control, making America great again, replacing income tax with levies on imports, all of the above, or none?"

Traders were meanwhile waiting on a decision from Russia on whether to mirror Ukraine's acceptance of a 30-day ceasefire as proposed by the United States.

"Investors remain on the edge of their seat as they weigh up the impact of tariffs and whether ceasefire talks will yield an agreement between Russia and Ukraine," noted Russ Mould, investment director at AJ Bell.

Trump's special envoy Steve Witkoff, who arrived in Moscow, could possibly meet Russian leader Vladimir Putin, according to a Kremlin aide.

But comments by Russian officials ahead of Witkoff's arrival that a temporary truce with Ukraine was not in Moscow's interest dampened hopes for a quick breakthrough.

Gold, seen as a safe-haven investment, came close to reaching a new record high.

Trump's programme of tariffs and pledges to slash taxes, regulations and immigration has sparked market volatility and concerns that the measures could reignite inflation.

This in turn could force the Federal Reserve to hike interest rates again and cause a recession.

Analysts pointed out that the latest US inflation figures, while welcome, had to be taken in context.

National Australia Bank's Tapas Strickland said it was "worth noting the data was for February and thus largely pre-dates any potential tariff impacts".

- Key figures around 1330 GMT -

New York - Dow: DOWN 0.3 percent at 41,220.43 points

New York - S&P 500: DOWN 0.2 percent at 5,587.50

New York - Nasdaq Composite: DOWN 0.3 percent at 17,597.07

London - FTSE 100: UP less than 0.1 percent at 8,547.99

Paris - CAC 40: DOWN 0.4 percent at 7,953.59

Frankfurt - DAX: DOWN 0.5 percent at 22,570.10

Tokyo - Nikkei 225: DOWN 0.1 percent at 36,790.03 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 23,462.65 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,358.73 (close)

Euro/dollar: DOWN at $1.0838 from $1.0890 on Wednesday

Pound/dollar: DOWN at $1.2928 from $1.2969

Dollar/yen: DOWN at 148.19 yen from 148.32 yen

Euro/pound: DOWN at 83.83 pence from 83.97 pence

West Texas Intermediate: DOWN 0.9 percent at $67.07 per barrel

Brent North Sea Crude: DOWN 0.8 percent at $70.37 per barrel

burs-rl/lth

Nogueira--PC