LIVE MARKETS-Before the bell: Tariff woes, defence points higher

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

BEFORE THE BELL: TARIFF WOES, DEFENCE POINTS HIGHER

European shares were set fall back from record highs at the open on Tuesday as new U.S. tariffs on Canada, Mexico and China took effect, raising concerns over escalating trade tensions.

EuroSTOXX50 and FTSE futures fell 1.1% and 0.5% respectively, while US contracts pointed to a steady start on Wall Street after a sharply lower close on Monday over tariff concerns and data that showed a dip in manufacturing.

Defence stocks sought to build on yesterday's supercharged rally with many shares including Germany's Rheinmetall RHMG.DE, Hensoldt HAGG.DE and Renk R3NK.DE rising on Tradegate.

Also, France's Thales TCFP.PA beat 2024 profit expectations, lifted by robust arms spending and recovering air traffic, and forecast higher sales and profitability for 2025. One trader called for a 10% surge in Thales at the open.

US President Donald Trump has paused military aid to Ukraine, deepening the fissure that has opened between the two one-time allies.

Elsewhere, Abu Dhabi National Oil Company and Austria's OMV OMVV.VI will merge their polyolefin businesses to create a $60 billion chemicals powerhouse.

In other earnings, Lindt & Spruengli LISN.S reported a slightly better than expected FY operating profit, as it weathers historically high cocoa prices.

British equipment rental firm Ashtead AHT.L missed profit and revenue expectations, pressured by weakness in the US construction sector, which led to a warning last December.

(Danilo Masoni)

EARLIER ON LIVE MARKETS:

NEW TRUMP TARIFFS TAKE EFFECT, EU ALSO IN CROSSHAIRS CLICK HERE