European Shares Slide as Healthcare Stocks Take a Hit Amid Tariff Jitters

European markets dipped due to declines in healthcare stocks and concerns over new U.S. tariffs. The STOXX 600 fell as Germany's DAX dropped 1.2%. Uncertainty surrounds the impact and response to tariffs set to be announced by Trump, further unsettling financial markets already anxious about inflation and stagnation.

European shares witnessed a decline on Wednesday, primarily driven by losses in healthcare stocks. Investors showed apprehension as they anticipate reciprocal tariffs from the United States, raising fears of sluggish worldwide growth and escalating inflation.

The pan-European STOXX 600 index dropped 0.7% early in the day, with Germany's trade-sensitive DAX plummeting 1.2%. As President Trump prepares to unveil his 'Liberation Day' tariff plans, expected at 2000 GMT, specifics remain incomplete and confidential.

France's industry minister, Marc Ferracci, emphasized Europe's commitment to a measured response, avoiding escalation of tensions. Meanwhile, concerns over potential stagflation have grown, reflecting heightened unease within financial markets.

Compounding the uncertainty are questions about potential retaliatory actions from other countries. The ramifications of U.S. tariffs on Italian enterprises could be severe, as warned by the head of Confindustria, a leading industrial association in Italy.

Unclear details surrounding the scale and impact of U.S. tariffs, along with other countries' countermeasures, have disrupted market sentiment. This triggered a drop in the STOXX 600 to its lowest in over two months, nearly 5.2% below its peak in March. The healthcare sector saw a decline of 2.2%, risking the erasure of gains accumulated throughout the year with major pharmaceutical companies experiencing substantial losses.

In contrast, Denmark's Svitzer experienced a meteoric rise in shares by 31.1%, spurred by A.P. Moller Holding's substantial cash bid. Meanwhile, Grifols' shares soared 10.9% on reports of potential takeover interest from Canada's Brookfield.

Market analyst Susannah Streeter from Hargreaves Lansdown remarked on the pervasive market jitters, exacerbated by the looming tariff announcement. Despite Novo Holdings' impressive financial performance in 2024, healthcare stocks continued to waver in response to persistent economic uncertainties.

(With inputs from agencies.)