European Shares Tumble Amid Auto Sector Slump and Trade War Anxiety

European shares declined on Friday, driven by auto sector losses and trade war concerns. Porsche's profit warning and President Trump's tariffs announcement amplified investor fears. Despite these challenges, the STOXX 600 rose for the week due to strong corporate reports and stable interest rate expectations.

European shares fell sharply on Friday, with the auto industry leading the decline as fears of an escalating global trade war unsettled investors. A grim profit forecast from Porsche added to the sector's woes. The pan-European STOXX 600 index dipped by 0.4%, while the auto sector plummeted 1.6%.

Porsche's shares tumbled 7.1%, marking its steepest fall since its stock market debut, following warnings that the expenses linked to new models and battery development would severely impact its 2025 profits. Concurrently, U.S. President Donald Trump announced upcoming reciprocal tariffs targeting multiple countries, further rattling the investment landscape.

Despite these hurdles, the STOXX 600 logged its seventh consecutive weekly gain, rising 0.5%, sustained by optimistic quarterly results from major firms like ArcelorMittal and Novo Nordisk. Economic analysts speculated that the U.S. Federal Reserve might hold interest rates steady until June, given robust employment data.

(With inputs from agencies.)