European Stocks Close Weak As U.S. Fiscal Deficit Fuels Growth Concerns

European stocks closed lower on Thursday as rising concerns over U.S. fiscal outlook and a lack of clarity on tariff negotiations rendered the mood cautious, prompting investors to lighten commitments.

The U.S. tax cut bill was passed in the House in a largely party-line vote early this morning, but it is feared that the mega-bill pairing tax relief with spending cuts could add trillions to the federal government's already massive debt and further slow U.S. economic growth.

The pan European Stoxx 600 ended down 0.64%. The U.K.'s FTSE 100, Germany's DAX and France's CAC 40 lost between 0.5 to 0.6%, while Switzerland's SMI closed down 0.89%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Russia, Spain and Sweden ended weak.

Portugal and Turkiye closed notably higher, while Iceland ended marginally up.

In the UK market, British Land Company, a real estate investment and development company, closed 5.5% down, after saying it expects earnings to be flat next year.

Airline EasyJet ended 2.7% down. The company reported wider loss for the first-half of its current financial year. In the first half, loss before tax widened to 401 million pounds from last year's loss of 347 million pounds. Basic loss per share was 39.5 pence, compared to loss of 34.3 pence a year ago.

Johnson Matthey soared more than 30% after the industrial group confirmed that it is in advanced discussions over a potential sale of a unit involved in the production of sustainable aviation fuel.

JD Sports Fashion, Convatec Group, Marks & Spencer, BAE Systems, Endavour Mining and Rolls-Royce Holdings closed higher.

DCC, Intermediate Capital Group, Persimmon, Intertek Group, Experian, Barratt Redrow, Melrose Industries and Weir Group ended on a weak note.

In the German market, Porsche, Merck, Puma, Heidelberg Materials, Sartorius and Brenntag lost 2 to 4.3%. RWE, Henkel, Siemens, Deutsche Bank, BASF, Mercedes-Benz and Rheinmetall also closed notably lower.

Siemens Energy and Bayer gained about 3.2% and 2.7%, respectively. Commerzbank climbed 1.3%.

In the French market, ArcelorMittal, Stellantis, Renault, Hermes International, STMicroElectronics, Saint Gobain, LVMH, TotalEnergies and Capgemini closed down 1.6 to 4%.

Thales gained about 1.7%. Essilor, Schneider Electric, Orange, Engie, Safran and Bouygues posted moderate gains.

Survey data from the statistical office INSEE showed France's manufacturing confidence weakened in May on deteriorating global orders and personal production expectations.