European Stock Markets Experience Sharp Decline, Banking Stocks May Enter Bear Market.

As global trade war risks escalate, European stock markets saw a significant drop on Monday, April 7th, with European bank stocks possibly entering a bear market.

According to a report by Consumer News and Business Channel (CNBC), as of 9:52 am London time on April 7th, the pan-European STOXX 600 index fell by 5.2%, with all sectors and major stock markets experiencing sharp declines. The German DAX index dropped by 5.6%, narrowing its initial 10% decline.

Last week, the regional STOXX 600 index fell by 8.4%, marking the largest weekly decline in five years.

On Wednesday, April 2nd, President Trump announced a list of reciprocal tariffs, imposing a 10% basic tariff on all imported goods and equivalent tariffs on major trading partners, including a 34% tariff rate on goods from mainland China.

On Friday, April 4th, the Chinese authorities announced retaliatory measures against the United States by imposing a 34% import tariff on all American products starting from April 10th. This move heightened concerns in the market about the global trade war.

The German DAX index dropped by 6.1% as of 10:13 am London time on Monday, marking the largest single-day decline since the COVID-19 pandemic outbreak in March 2020.

It is expected that the MDAX index in Germany (comprising 50 medium-sized German company stocks) will also plummet to its lowest level since 2020.

On Monday, majorly affected German listed companies include defense giants Thyssenkrupp, Hensoldt, and Rheinmetall, with their stock prices falling by 10.6%, 10.7%, and 9.5%, respectively.

Sportswear giants Adidas and Puma also witnessed significant stock price declines of 8% and 9%, respectively.

According to Reuters, earlier on Monday, the European bank stock index plummeted by 4.8%, dropping over 20% from recent closing highs, indicating its entry into a bear market.

Adding to the declines of the past two trading days, European bank stocks had fallen by over 18% on Monday.

Stock prices of German banks Commerzbank and Deutsche Bank, French Credit Agricole and Societe Generale, as well as BNP Paribas, experienced declines ranging from 9% to 10%.

Barclays in the UK fell by 9%, and HSBC saw a decline of around 5%.

European Commission President Ursula von der Leyen stated that the EU is prepared to take corresponding countermeasures against the new tariff policies of the Trump administration to safeguard the interests of the European Union.