Europe: Shares hit a weekly decline as tariff worries persist

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[Bengaluru] European shares slid on Friday (Mar 28) as fresh US data amplified worries about higher inflation, ending a week where new tariff announcements from US President Donald Trump kept investors away from risky assets.

The pan-European Stoxx 600 index ended 0.7 per cent lower and was down 1.4 per cent for the week, its worst week since Dec 16.

A report showed the core US personal consumption expenditures (PCE) index, the Federal Reserve’s preferred gauge for prices, rose at a slightly faster monthly rate of 0.4 per cent.

“We’re seeing some risk-off sentiment in the market. Today it’s been exacerbated by that stronger core PCE data, which weighed mostly on US stocks, but also translated into European stocks as well,” Daniela Hathorn, senior market analyst at Capital.com, said.

Europe’s benchmark index retreated to two-week lows on Thursday after Trump announced 25 per cent import tariffs on all imports of vehicles and foreign-made auto parts earlier, raising jitters ahead of an Apr 2 deadline on reciprocal tariffs on US trading partners.

“Markets don’t expect tariffs to be as bad and widespread as originally thought. It is still going to affect growth in the near future,” Hathorn added.

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Still, the Stoxx 600 index is set for its strongest quarterly performance in two years on Germany’s spending plans and a rotation out of US stocks.

Data showed Germany’s unemployment rose in March at the fastest rate since October 2024, as an economic malaise puts pressure on the job market even against a backdrop of long-term labour shortages.

The country’s benchmark index dropped 1 per cent.

Inflation in March came in far below forecasts in two of the eurozone’s largest economies, Spain and France, bolstering bets for another European Central Bank (ECB) rate cut in April.

Short-dated yields came under pressure. German two-year yield, more sensitive to the ECB policy rates, dropped four basis points to 2.027 per cent, its lowest level since Mar 4.

The real estate stock which particularly benefits from lower interest rates, jumped 1.5 per cent on the day. Utilities, often traded as a bond proxy, surged 1.6 per cent.

In other company news, Deutsche Bank fell 2.9 per cent as the bank extended CEO Christian Sewing’s contract, while its deputy and another top executive will depart as part of a management revamp, cementing the leadership team of Germany’s largest lender for the next phase of its turnaround.

Ubisoft’s shares reversed gains to end 1.8 per cent lower on Friday, after rising as much as 12 per cent earlier on plans to set up a subsidiary to house three of its popular video game franchises. REUTERS

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