Trump's Tariff Threat Sends European Shares Tumbling

European shares dropped as investors reacted cautiously following President Trump's announcement of tariffs targeting all countries. The STOXX 600 index fell, reflecting fears of a global slowdown. Defensive stocks rose slightly, while Fortnox shares surged after a notable buy-out offer.

European shares experienced a significant decline on Monday as investors reacted with caution to President Donald Trump's statement that tariffs would target all nations. The announcement intensified concerns over a potential global economic downturn, prompting investors to flee risky investments.

The pan-European STOXX 600 index recorded a 1.2% drop at 0709 GMT, while major economies like Germany and France saw their benchmark indexes decrease by 1% and 1.2%, respectively. The U.S. market forecast pointed towards a sharp decline, leading investors to seek refuge in gold and the Japanese yen. The financial markets are preparing for retaliatory tariffs from U.S. trading partners on April 2, a date Trump has dubbed "Liberation Day" for the American economy.

In light of the tariff scenario, Goldman Sachs revised down its GDP forecasts for the U.S. and euro area and predicted an additional quarter-point rate cut from both the Federal Reserve and the European Central Bank. While most European sectors faced losses, shares in Sweden's Fortnox surged by 35% following a joint cash offer from its largest shareholder and private equity group EQT, valuing the company at approximately 55 billion crowns.

(With inputs from agencies.)