Europe midday: Shares plunge as China retaliates in trade war

(Sharecast News) - European stock markets were in freefall on Friday as China announced retaliatory measures to swingeing US tariffs, sending the Stoxx 600 index down more than 5% and below 500 points.

China said it would match the tariffs imposed by President Donald Trump and hit US imports with a 34% levy and added 11 firms to a list of companies barred from doing business in the country.

China's customs agency said it would also stop chicken imports from some US producers.

All major bourses were down sharply by midday GMT with Germany's DAX down 4.65%, Britain's FTSE 100 3.63%, France's CAC-40 more than 4% and the Eurostoxx 50 - which covers the eurozone - off by 4.63%.

Europe's benchmark index closed 2.57% lower on Thursday after US President Donald Trump slapped a minimum 10% levy on more than 180 countries, effectively starting a global trade war.

Raifeissen Bank, Sabadell, Deutsche Bank, Commerzbank, Danske Bank, Standard Chartered and BPER Banca were among the major fallers, most down by more than 10%

"Despite months of sabre-rattling by Donald Trump, markets appear to have been unprepared for the depth and breadth of tariffs announced by the White House," said Derren Nathan, head of equity research at Hargreaves Lansdown.

In other equity news, shares in Gerresheimer plunged by a fifth on a report that KKR has withdrawn from the private equity consortium pursuing a potential acquisition the German pharmaceutical packaging and drug delivery systems maker.

Oil prices fell again after a 6.4% plunge on Thursday. Brent crude was down almost 2% $68.79 a barrel as investors feared a slowdown in the global economy and an upcoming output increase planned by OPEC+ nations next week.

In other economic news, the eurozone construction sector remained in contraction in March as activity fell sharply, although at a softer pace due to a slower decline in new orders according to a survey published on Friday.

HCOB's eurozone construction PMI total activity index came in at 44.8 in March, up from 42.7 in February, the softest reduction in new orders since April 2022, but still well below the 50 mark that indicates expansion.

German factory orders unexpectedly stalled in February, official research showed on Friday. According to Destatis, the Federal Statistical Office, new orders in manufacturing showed no growth in February compared to the previous month.

That was an improvement on January's 5.5% slump, which had been revised upwards from the provisional reading of -7%. But it remained well below forecasts for growth of 3.5%.

Reporting by Frank Prenesti for Sharecast.com