European stock markets experienced a significant decline on Friday because banks and healthcare companies led the market down while U.S.-EU trade tensions created uncertainty among investors. The STOXX 600 index declined by 1% which ended its four-day winning streak while becoming the largest one-day decline since March. The DAX index of Germany and FTSE index of the UK both retreated from their recent peaks by 0.8% and 0.4% respectively. Markets remain in anticipation of official U.S. statements regarding EU tariffs while trade negotiations between the two parties continue to deteriorate. TD Securities analysts believe Trump’s delay signals his opposition to a restricted agreement which could lead to increased tariff rates. The revenue of FTSE Europe could decrease by 2.4% and net income could drop by 6% according to HSBC if the U.S. imposes 10%-20% tariffs on European goods. The banking sector declined 1.8% as Norway’s DNB stock price dropped almost 9% after releasing disappointing earnings results. The healthcare sector pulled down the index because Novo Nordisk shares declined by 3.6%. The energy sector stood out as a positive performer when BP stock price increased by 3.4% following their positive Q2 output prediction. The global market and investor community remains uncertain because Trump announced 35% Canada tariffs and 15%-20% targets for broader targets.
