Europe midday: Trump threats over Greenland put brakes on rally

7th Jan 2026 11:10

(Sharecast News) - European shares hit more intra-day highs but were flat by midday as geopolitical tensions, including US President Donald Trump's renewed threats to annexe Greenland, hit sentiment.

The pan-regional Stoxx 600 index hit 605.96 points and was just below this level at 1130 GMT, a gain of 0.05%. Germany's DAX hit a record 25,098 while the UK's FTSE 100 was in retreat, down 0.61%, and France's CAC 40 gained 0.05%.

Oil markets were in focus again as Trump said he would be taking $2bn in Venezuelan crude and claiming cash from its sales would be disbursed to the US and Latin American country.

The move comes after the dark-of-night snatching of former Venezuela President Nicolas Maduro over the weekend. Trump has threatened the country's new leadership with more military attacks if it does not bow to his demands.

Adding to geopolitical jitters were further claims from Washington that Greenland would be taken over with Trump saying military force was "always an option".

European leaders from France, Germany, Britain and other nations issued a joint statement with the prime minister of Denmark, Mette Frederiksen, rejecting Trump's claims.

The price of Brent crude fell around 1% to $60.10 a barrel while West Texas Intermediate was 1.4% lower at $56.38.

"These events highlight a risk that many did not predict in their forecasts for 2026: an unpredictable US foreign policy. While 2025 was all about Trump's 'bull in a china shop' approach to tariffs, 2026 could be the same, but with foreign policy," said XTB research director Kathleen Brooks.

"Venezuela had few friends, so taking out Maduro could be easier than taking over Greenland, especially after Europe's top leaders defended Greenland and Denmark from Trump's remarks."

"Thus, although we could see Trump roll back on some of his recent rhetoric around Greenland, it is still unsettling when there is talk of US military force towards a NATO member, which Greenland is as part of Denmark. Thus, it is no surprise that stocks are lower today and bonds are rising, with European sovereign yields falling in early trading."

In a raft of economic news, eurozone inflation fell to 2% last month, in line with forecasts and the European Central Bank's target rate.

The figure compared with November's 2.1% and will bolster the case for interest rates within the single-currency bloc to remain on hold this year after several cuts in 2025.

Core inflation, which strips out volatile food and energy prices, fell to 2.3% from 2.4% in November. ECB forecasts are for an average inflation rate of 1.9% this year compared with 2025's 2.1%.

Meanwhile, the eurozone's hard-pressed construction sector strengthened marginally in December, following renewed growth in Germany.

The HCOB Eurozone construction PMI total activity index rose to 47.4 in December from 45.4 in November. It was the softest contraction since February 2023. However, it has now been below the neutral 50.0 benchmark for 44 consecutive months.

In Germany, retail sales fell by their most in five months in November, according to the Federal Statistical Office on Wednesday, as food sales dropped sharply.

Retail sales fell by 0.6% over the month, wiping out a 0.3% gain over the preceding two months and surprising economists who had pencilled in an increase of 0.2%. This was the first decline since August and the steepest fall since May.

The labour market in Europe's biggest economy showed continued signs of stagnation at the end of 2025, with unemployment rising modestly in December but less than economists had anticipated.

The number of unemployed people in Germany increased by 3,000 in seasonally adjusted terms during December, below the 5,000 rise forecast by analysts and following a smaller 1,000 increase in the previous month.

On the equities front, Redcare Pharmacy slumped after annual results and Polish postal provider InPost gave up some of Tuesday's massive gains driven by a potential bid approach from an unnamed suitor.

Reporting by Frank Prenesti for Sharecast.com