European shares end flat as Trump tones down Greenland rhetoric

By Niket Nishant, Avinash P and Johann M ⁠Cherian

Jan 21 (Reuters) - European ⁠shares trimmed ‍earlier losses and closed flat on Wednesday after U.S. President Donald Trump softened his rhetoric around the acquisition of Greenland, handing some relief to investors rattled by his latest aggressive ‍gambit.

The pan-European STOXX 600 ended flat at 602.67 points after falling nearly 1% ​earlier in the session.

Trump's threat to impose a string of increasing tariffs on eight European countries until the U.S. is allowed to ​buy Greenland has sparked a sell-off in global markets, with the STOXX 600 touching losses of nearly 3% at one point this week.

However, on Wednesday, Trump ruled out the use of force in his quest to acquire the autonomous ​Danish territory in a speech at the World Economic Forum at Davos, Switzerland.

Trump did not refer to his tariff threats against Europe, and the gains in safe-haven precious metals were a reflection that ​caution still lingered.

Against that backdrop, mining stocks jumped 3.7%, while chemicals gained 1.7%.

Sutanya Chedda, a European equity strategist at UBS, said that the ‌Swiss bank was looking at sectors in Europe that are less internationally exposed and more domestically aligned.

“Some of the themes and sectors that we think are going ​to be driving markets in Europe this year are going ⁠to be things like banks, insurance as well as utilities, renewables, electrification and anything that's aligned to productivity," she said.

"Anything that's kind of starting to reap in ‌on some of those AI rewards or capex investments ... are going to be the winners of 2026," she added.

Investors were also focused on corporate updates. Data compiled by LSEG earlier this month points to quarterly earnings expected to drop ‌the most since late 2023.

Insurance stocks fell 1.7%, with Admiral Group falling 4.1% after Goldman Sachs downgraded the British insurer ‌to sell from neutral.

Danone fell 8.4%. BofA flagged that China's dropping birthrate could further shrink the French consumer company's market there.

On the flip side, Rio Tinto gained 5.2% after the miner beat expectations for quarterly iron ore and copper production.

Barry ‍Callebaut rose 3.3% after it appointed former Unilever boss Hein Schumacher as its chief executive.

Edenred shares jumped 10.4% after the French vouchers and benefit cards provider ⁠won an injunction in Brazil to suspend planned changes to the country's new meal voucher system.

On the data front, British consumer prices rose more than expected in December, but services inflation, closely watched by the Bank of England, came in line with estimates.

(Reporting by Niket Nishant, Avinash P and Johann M Cherian in Bengaluru; Editing by Mrigank Dhaniwala, Vijay Kishore and Joe Bavier)

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