European shares rise; Heathrow fire impacts airlines

European shares ended the week lower as global stock markets faced uncertainty over trade tensions and geopolitical issues. On Friday, European markets fell for a third straight session. The pan-European STOXX 600 index dropped by 0.6%. Travel and leisure stocks were particularly affected after a fire at Heathrow Airport in Britain caused it to close temporarily. Flights were expected to resume later in the day. The closure impacted airlines, with British Airways' parent company IAG down 1.9%, Lufthansa falling 1.7%, and Ryanair declining 2.3%. Overall, the travel and leisure sector finished 1.6% lower. Experts anticipate the effects of the airport closure will be significant but temporary, depending on how quickly operations can return to normal. Basic resources miners also suffered losses, with a decrease of 2.6% as copper prices fell from recent highs. Despite the declines, the European benchmark index was up 0.5% for the week. This improvement followed the German parliament's passing of reforms for increased government borrowing and an economic fund of 500 billion euros. Concerns about slower growth and higher inflation due to ongoing trade uncertainties and the Russia-Ukraine conflict have tempered investor confidence. Central banks, including the Federal Reserve and the Bank of England, kept interest rates unchanged, highlighting an uncertain growth outlook. European Central Bank President Christine Lagarde warned that new US tariffs could lower euro zone growth by up to 0.5 percentage points. Additionally, Germany-based lubricant supplier Fuchs saw its shares drop 7.2% after its profit forecast for 2025 fell short of market expectations.