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European automakers skid to 3-month lows

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Investors await Fed minutes, Nvidia ( NVDA ) earnings

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M&S soars after reporting jump in annual profit

(Updated at 0800 GMT)

By Sruthi Shankar

May 22 (Reuters) - European stocks slipped on Wednesday,

hurt by a selloff in automakers following a report about

possible Chinese tariffs on imported cars and a

stronger-than-expected British inflation data further dampening

the mood.

European automakers fell 1.9% to a

more-than-three-month low, with shares of Mercedes-Benz

, BMW and Volkswagen falling in

the range of 1.1% and 2.3%.

China should raise its import tariffs on large

gasoline-powered cars to 25%, a government-affiliated auto

research body expert told China's Global Times newspaper as the

country faces sharply higher U.S. auto import duties and

possibly additional duties to enter the EU.

"The deadline is approaching for the EU to announce the

conclusions of its investigation into Chinese EV subsidies, and

this move by China is clearly a warning shot that if the EU

takes action then it can expect a similar response from China on

EU car exports," said Stuart Cole, chief macro economist at

Equiti Capital.

The European Commission launched an investigation in October

into whether fully-electric cars manufactured in China were

receiving distortive subsidies and warranted extra tariffs. The

EU could impose provisional duties in July.

The continent-wide STOXX 600 index dipped 0.3%,

with Britain's FTSE 100 leading losses in the region

after data showed UK inflation fell by a less-than-expected 2.3%

in April, prompting traders to cut their bets on a Bank of

England interest rate cut next month.

Investors are awaiting minutes from the U.S. Federal

Reserve's last policy meeting as well as AI darling Nvidia's ( NVDA )

quarterly earnings later in the day to gauge if the

recent rally in markets could continue.

The European Central Bank should not necessarily follow up a

rate cut in June with another move the following month, even if

inflation is on its way to target, Bundesbank President Joachim

Nagel said in a newspaper interview published on Tuesday.

Among other movers, Swiss Life dipped 1.9% after

Switzerland's largest life insurer narrowed its 2024 outlook for

fee income.

Marks & Spencer ( MAKSF ) jumped nearly 9% after the British

retailer reported a 58% rise in annual profit as its strategy to

re-shape the business delivered strong sales growth in both its

food and clothing divisions.