(Reuters) - Barclays ( JJCTF ) on Monday cut its year-end target for Europe's STOXX 600 index for the second time in under a month as escalating trade tensions and U.S. tariffs fueled recession fears.

The brokerage cut its target for the European benchmark index to 490 from 580, but warned that "setting a point forecast has little value at this stage - there is no precedent, nor fundamental framework to rely on for this crisis."

European stocks plunged to a 16-month low on Monday amid a global markets meltdown, as President Donald Trump stood firm on his sweeping tariff plans and investors bet recession risks could prompt a U.S. rate cut as early as May.

Barclays ( JJCTF ) warned the STOXX 600 index could drop to 390 points as a worst-case scenario, but could also rebound to about 550 if trade tensions de-escalated quickly enough to avoid a recession.

The index last closed at 496.33 points on Friday.

"We think global equities are unlikely to go back to recent highs anytime soon, as much damage has been done," said Barclays ( JJCTF ) strategists led by Emmanuel Cau.

Cau's forecast comes as global brokerages raise their recession risk forecasts, with J.P.Morgan estimating a 60% chance of a U.S. and global recession, while Goldman Sachs projecting the odds at 45%.

Barclays ( JJCTF ) also turned "overweight" on UK's benchmark FTSE 100 index, noting that worries about stagflation could benefit the index due to its tilt towards defensive stocks, and upgraded the European healthcare sector to "market weight", while trimming its ratings on diversified financials and leisure sectors to "market weight" and "underweight" respectively.