A look at the day ahead in European and global markets from

Ankur Banerjee

Investors will be fixated on European auto stocks on

Thursday after Trump's announcement of duties on imported cars

and light trucks, which hit Asian car makers' shares and drew a

strong rebuke from the auto industry.

German automakers Mercedes Benz, BMW and Porsche

are all likely to come under heavy pressure. The

European automobiles and parts index hit a seven-week

low on Wednesday and is poised to fall further.

The region's top carmaker, Volkswagen, is

particularly exposed, with 43% of its U.S. sales sourced from

Mexico, according S&P Global Mobility.

Europe's carmakers exported around 800,000 vehicles to the

United States last year, according to official U.S. trade data,

about four times the number of cars exported by the U.S. to

Europe.

Chrysler parent Stellantis ( STLA ) and Volvo Cars

will also be in focus.

Automakers aside, market moves during Asian hours were muted

as investors take a wait-and-see approach, although futures

point to a lower open in Europe. The euro hit a

three-week low in early Asian hours but has since inched back

up.

The Canadian dollar was steady and the Mexican peso

was 0.5% weaker. The yen was a tad stronger.

Still, the spectre of a wide-ranging trade war looms large,

leaving investors skittish and risk-averse.

The European Commission said it would assess Trump's tariffs

and continue to seek negotiated solutions, while safeguarding

its economic interests.

The auto tariffs, if left in place for an extended period,

could add thousands of dollars to the cost of an average U.S.

vehicle purchase. Nearly half of all cars sold in the U.S. last

year were imported, according to research firm GlobalData.

Investor attention will also focus on reciprocal tariffs due

to be announced next week. Trump indicated the measures may not

be the like-for-like levies he has been saying he would impose.

Key developments that could influence markets on Thursday:

Possible responses to Trump's auto tariffs