European Shares Plunge Amid Recession Fears Following US Tariff Announcements

European shares experienced a significant drop this Friday, culminating in a steep weekly loss. This decline follows President Trump's announcement of extensive tariffs on U.S. trading partners. Investors are now grappling with the potential for a global recession, leading to increased speculation about potential ECB interest rate cuts.

On Friday, European shares suffered a substantial decline, steering towards a pronounced weekly downturn, as global recession concerns mounted. These fears were fueled by U.S. President Donald Trump's announcement of expansive tariffs targeting trading partners.

The pan-European STOXX index recorded a fall of 0.9% by 0710 GMT, marking a weekly loss of 4.4%, the most significant drop since June 2022. Europe faced a 20% import tariff rate from the U.S., driving traders to speculate on interest rate reductions by the European Central Bank to sustain economic growth.

European banking stocks, notably vulnerable to economic shifts, incurred the most considerable sectoral losses, dropping 3.8%. Investors eagerly await the critical U.S. jobs report due at 1230 GMT, as it offers insight into the health of the U.S. economy before the latest trade tensions heightened recession worries.

Additionally, data on Friday revealed that German industrial orders stagnated in February, although January's figures were revised upwards. This suggests that while Germany's industrial sector might have reached a low point, its recovery could be slow. In corporate developments, Gerresheimer's stock plummeted by 6% following reports that KKR has withdrawn from a takeover negotiation involving the German specialty packaging company.

(With inputs from agencies.)