European Shares Shudder as Trade War Tensions Mount

European markets nosedived as China retaliated against U.S. tariffs, stoking fears of a global recession. Major indices, including the STOXX, DAX, and blue-chip index, entered correction territory. Multiple sectors, especially banking and luxury goods, faced steep declines amid heightened volatility and economic uncertainty.

In a dramatic market shift on Friday, European shares plummeted in response to China's retaliatory tariffs following U.S. President Donald Trump's sweeping levies. The situation has amplified fears of an impending global recession, gripping markets with uncertainty.

The pan-European STOXX index dropped by 5.2% at 1131 GMT, marking a correction phase and sliding about 12% from its record-high close on March 3. Germany's DAX and the eurozone's blue-chip index also teetered on the brink, with respective drops of 5.7% and 5%.

China escalated the trade war through substantial countermeasures, including a 34% tariff on U.S. goods and restrictions on some exports. Meanwhile, European markets, particularly the banking and luxury sectors, recorded significant losses amid growing volatility and economic growth concerns.

(With inputs from agencies.)