Madrid, Apr 7 (EFE).— European stock markets plunged around 6 percent on Monday, tracking heavy losses in Asia as fears grow that the escalating US trade war could tip the global economy into recession.
Major European indices slumped, echoing a dramatic sell-off in Asian markets triggered by Friday’s sharp drop on Wall Street and deepening investor concerns over US trade policies.
By 09:30 GMT, Milan led the decline with a 6.7 percent drop, followed by Paris (-6.3 percent), Frankfurt (-6.19 percent), and the Euro Stoxx 50 index of top eurozone companies (-6.24 percent).
Madrid was down 5.94 percent, London shed 4.86 percent, and the broader Stoxx 600 fell 5.7 percent.
Although markets later moderated their opening losses, the damage was widespread.
Tech, Industry, and Energy Hardest Hit
In the Stoxx 600, the sectors bearing the brunt included technology, industrials, and energy, all of which were down by an average of 6 percent. Germany’s Auto1 Group suffered the steepest loss, plunging over 12 percent, while only two companies—Frontline (+1.56%) and Qiagen (+1.27%)—closed in positive territory.
Wall Street Meltdown Ripples Globally
The fallout comes after Wall Street recorded its worst session since March 2020. On Friday, the Dow Jones tumbled 5.5%, the S&P 500 fell 5.97%, and the Nasdaq Composite dropped 5.82%. U.S. futures remained down 4% on Monday, compounding investor fears.
The sell-off was fueled by heightened tensions between Washington and Beijing, with China retaliating against new U.S. tariffs by announcing a 34% levy on American imports and restrictions on rare earth exports.
U.S. President Donald Trump stoked the uncertainty, tying tariffs to efforts to reduce the U.S. trade deficit with China, the EU, and others. “The countries of the world are scamming us and that has to end,” said Commerce Secretary Howard Lutnick.
However, Treasury Secretary Scott Bessent dismissed concerns of a recession, contradicting previous warnings from within the administration.
Asian Markets Reel from Worst Losses in Years
Asian markets suffered their biggest rout in years. Tokyo dropped 7.75 percent, Hong Kong plunged 13.22 percent, its worst day since October 2008, and Taiwan saw its steepest single-day drop in history at 9.57 percent.
Shanghai shed 7.34 percent, Shenzhen 10.79 percent, Seoul 5.57 percent, and Sydney 4.23 percent, even as Chinese officials weighed advancing stimulus plans to stabilize markets.
Other Assets Also Slide
The euro hovered at $1.0956, down from $1.105. The German 10-year bond yield dropped 12 basis points to 2.457 percent. Brent crude fell 3.93 percent to $63, the lowest since April 2021. Gold dipped 0.42 percent to $3,025.50/oz. Bitcoin slid 3.2 percent to around $76,300. EFE
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