Europe defence shares set for biggest daily drop since April 2020

April 7 (Reuters) - European defence company shares plunged on Monday amid a steep selloff in equities sparked by U.S. President Donald Trump's sweeping tariffs and fears of an ensuing global recession.

An index of aerospace and defence companies .SXPARO, which so far this year has been enjoying a record -breaking run, dropped 9.3% at 0721 GMT, following an 8% decline on Friday.

If losses continue, this will mark its biggest one-day decline since early April 2020.

German defence companies Rheinmetall RHMG.DE, Hensoldt HAGG.DE, Renk R3NK.DE were down between 12% and 14%.

Europe's biggest defence company by market value, BAE Systems BAES.L was down 5%.

France's Dassault Aviation AM.PA and Thales TCFP.PA dropped between 8% and 13%. Sweden's Saab SAABb.ST was down 7%.

Britain's Rolls-Royce RR.L, Chemring Group CHG.L, Babcock International BAB.L and Qinetiq QQ.L were all down between 5% and 8%.

Defence companies had previously ranked among the best performers in Europe in 2025, driven up by the prospect of a swell of government spending on regional security.