FRANKFURT: European shares touched their lowest in nearly two weeks on Tuesday, as mounting unease over US President Donald Trump’s tariff threat over Greenland hurt optimism from earlier in the month.
The pan-European STOXX 600 ended 0.7 percent lower, marking its biggest two-day drop in two months. France’s CAC 40 index dropped 0.6 percent to touch a one-month low, while Germany’s DAX slipped 1 percent.
Trump threatened to implement a wave of increasing tariffs from February 1 on eight European countries until the US is allowed to buy Greenland, fuelling fears of a renewed trade war.
While some remain sceptical about the extent to which Trump will follow through on his threats, investors are on edge as the US president has shown little sign of softening his rhetoric.
“So markets have reacted but there’s clearly room for bigger moves if the rhetoric increases further. Trump will likely continue to be active beforehand but remember he speaks at Davos tomorrow and this would be an ideal location for him to get his full views of the world across,” said a group of analysts at Deutsche Bank led by Jim Reid.
Top policymakers from around the world have gathered in Davos, Switzerland this week for the WEF’s annual meeting, which will be closely watched for signals on economic policy and the geopolitical outlook.
Corporate earnings and data are also expected to steer market sentiment in Europe this week.
French automaker Renault Group’s shares rose 2.2 percent after it said sales volumes rose 3.2 percent in 2025. Oil major TotalEnergies was up 1.4 percent, as the company said it expects lower oil and liquefied natural gas sales in the fourth quarter of 2025, but stronger margins on refining fuels.
Britain’s Wise jumped 16 percent on robust third-quarter results, while Qiagen gained 12.4 percent after a report said it is considering strategic options amid fresh interest.
Sectors on the STOXX 600 were broadly in decline, led by real estate’s 1.9 percent fall, pressured by the steepening of euro zone bond yields.
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