European shares drop as Trump's tariffs plan fans trade war fears

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Feb 27 (Reuters) - European shares fell sharply on Thursday as U.S. President Donald Trump's plan for a 25% tariff on cars and other goods from the European Union and the region's vow to counter "firmly and immediately" fanned fears of an escalating trade war.

The pan-European STOXX 600 index .STOXX has retreated 0.7% as of 0813 GMT, after closing at a record high in the previous session.

Shares of some of the biggest European carmakers skid, with an index of automakers and component makers .SXAP falling more than 3%. Stellantis STLAM.MI, Volkswagen VOWG_p.DE and Porsche PSHG_p.DE all reversed 2%.

Ferrari RACE.MI fell more than 6% after Exor EXOR.AS sold a roughly 4% stake in the luxury automaker for 3 billion euros ($3.14 billion).

Rolls-Royce RR.L, however, soared 16% after the British engine-maker lifted its mid-term targets and beat 2024 profit growth expectations as widebody jets flew more and its cost-saving plan delivered.

In other earnings-related moves, WPP WPP.L tumbled 16% after the British ad group reported a bigger-than-expected 1% fall in full-year organic revenue.

Howden Joinery HWDN.L dropped 6.6%, and dragged retailers .SXRP down 1.7%, after the kitchen and joinery supplier missed annual revenue expectations.