European stocks down with bank and healthcare drag
The pan-European STOXX 600 index closed 1% lower, snapping a four-day win streak and clocking its biggest single-day decline in over three-months.
Germany's DAX and Britain's FTSE both came off their record high levels seen this week to fall 0.8% and 0.4%, respectively on Friday.
The EU initially hoped to strike a comprehensive trade agreement with the US, including zero-for-zero tariffs on industrial goods, but months of difficult talks have led to the realization it will probably have to settle for an interim agreement and hope something better can be negotiated.
'We had expected it to be approved on Wednesday, so the longer this drags on, the more we worry that Trump isn't on board, and the EU could get hit with significantly higher tariffs yet again,' TD Securities analysts said in a note.
HSBC estimates that a 10%-20% hike in import tariffs by the US on regional goods could suppress the overall revenue of the FTSE Europe index by 1.2%-2.4% and the net income in the range 4.0%-6.0%.
Risk sentiment took a hit globally after Trump
announced a 35% tariff rate on all imports from Canada from August 1 and floated a blanket 15% or 20% tariff rate on other countries, up from the current 10% baseline rate.
European banks were at the forefront of the selloff with a 1.8% fall. Norway's largest bank DNB lagged with an 8.8% slide after reporting an earnings miss for the second quarter, hit by weaker than expected interest income and higher loan losses.
Health care stocks, which hold a weight of more than 12% on the STOXX, also saw heavy losses on Friday with Danish drugmaker Novo Nordisk down 3.6%.
A rare bright spot was energy, with shares of BP up 3.4% after the British oil giant said its second quarter upstream output is set to be higher than previously forecast.
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