Europe midday: Shares staunch losses after morning tariff bloodbath

(Sharecast News) - The bloodletting on European share markets was partially staunched by midday on Monday after the benchmark Stoxx 600 index sank to its lowest level in a year on fears the trade war stoked by US President Donald Trump's tariff measures would spark a recession.

The pan-regional index was down more than 4.4% at 474.12, having hit 464 in opening trades. Germany's DAX slumped 5%, Britain's FTSE 100 tumbled 5%, France's CAC-40 6%, and Italy's MIB 5.7%. The Eurostoxx 50 index of Europe's 50 largest companies was down 4.7%.

Sentiment was worsened by more bellicose remarks from Trump over the weekend when he said countries would have to pay "a lot of money" to lift swingeing tariffs adding that "you have to take medicine to fix something".

Asian equities suffered a similar bloodbath overnight after China on Friday hit back with big tariffs of its own against US imports, raising the stakes in a trade war that investors fear could trigger a global recession. Shares in Hong Kong were down 12% to their lowest level in more than 16 years, while Tokyo plunged more than 7%.

"China is clearly in the mood for the fight, and with the world's two largest economies at loggerheads, the result has been ugly for investors," said Richard Hunter, head of markets at Interactive Investor.

"Retaliatory tariffs announced on Friday by China sent markets into another tailspin, while comments from President Trump over the weekend will do little to assuage the situation, with US futures already pointing to another difficult trading session to come."

Oil prices fell further on worries of a global slowdown, with Brent crude down 3.77% to $63.11 a barrel.

There were no winners on the equities front. German arms maker Rheinmetall tanked by a third in the morning but recovered to be 4% lower at midday, while compatriot banks Commerzbank and Deutsche Bank were down by around 3-4% after taking a battering on Friday and again on Monday.

Swiss pharma group Sandoz was down 4% after a 20% decline in the morning. Aircraft engine maker Rolls-Royce recovered to be 2.5% lower after a 13% slump and global miner and commodities trader Glencore was off by 2%.

Reporting by Frank Prenesti for Sharecast.com