European shares slip as fresh US trade uncertainty sours sentiment

By Johann M Cherian and Purvi ‌Agarwal

Feb 23 (Reuters) - European shares ​fell on ​Monday as renewed uncertainty over U.S. trade policy gripped financial markets after President Donald Trump announced a new blanket tariff rate.

The STOXX closed 0.5% lower after logging its biggest weekly ‌jump since early January on Friday. Germany's exporter-heavy DAX was among the biggest decliners, ⁠falling 1.1%.

The pan-European index ended last week with a record high after the U.S. Supreme Court struck down tariffs that Trump had ‌slapped on global economies last year.

Over ‌the weekend, Trump announced a new 10% rate and then lifted it to 15%, sparking ambiguity over the relevance of trade deals, such as those with the European Union. The European Commission has ruled ​out changes.

"It will continue to be a source of uncertainty for markets as traders attempt to price in the implications of what is still a movable feast," said Benjamin Picton, senior market strategist at ⁠Rabobank.

"All of this is likely to add cost for businesses who need to understand the new rules, litigate to recover illegal import duties and ​potentially recalibrate their supply chains (again)."

The resurgence in trade tensions with the U.S. over Greenland this year, along with Washington's attempt to upend the global security order, has ​pushed the euro zone to forge partnerships with Asia and ‌Latin America, while also seeking greater cooperation within Europe.

On Monday, healthcare shares dropped 1.4%. Danish heavyweight Novo Nordisk plunged 16.5% to the bottom of the STOXX 600 after ⁠its experimental obesity drug CagriSema did not meet the primary endpoint in a trial designed to show it was non-inferior to competitor Eli Lilly's Tirzepatide in reducing body weight

Industrials led sectoral declines, with Siemens Energy and Airbus weighing it down.

Financial services ⁠lost the most, down 2.1% while energy shares hit a record high tracking gains in oil prices.

Utilities were the biggest gainers, ​up 1.1%. The index was boosted by a 6.8% jump in Enel (OTCBB: ENEI) after Italy's biggest utility said it would increase capital expenditure over the next three years, shifting focus to renewables, mainly in Europe and the U.S.

The broader defence sector lost ‌1.6% after Reuters reported that Iran has indicated it is prepared to make concessions on its nuclear programme if the U.S. met certain demands.

French defence technology group ‌Exosens shed 9.6%, retreating from a record high hit on Friday, even as it issued a higher medium-term guidance.

Johnson ⁠Matthey slumped 16.3% after agreeing to slash the ‌sale price of its catalyst ​technologies business to Honeywell (NASDAQ: HON), after the unit underperformed in fiscal 2025.

(Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru and Danilo Masoni in Milan; Editing by Mrigank Dhaniwala and ‌Toby Chopra)

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