FRANKFURT: European shares closed at a four-week high on Wednesday, with banks the biggest boost as investors awaited signs of progress on a trade accord between the United States and the European Union.
The pan-European STOXX 600 index rose 0.8% to its highest close since June 12. Italy’s bank-heavy benchmark jumped 1.6% to its highest since 2007.
Lender UniCredit was among the biggest gainers on the index, advancing 4.6% to its highest since 2011. The Italian lender met renewed German opposition to its takeover ambitions for Commerzbank after it doubled its voting stake in the rival.
A broader gauge of euro zone banks climbed 2.7% to its highest level since 2010, with French bank Societe Generale also advancing 4%.
The index tracking European defence companies gained 1.4% to reach an all-time high.
German defence contractor Renk added 5% after a Bloomberg report said the company was considering selling its civilian industrial unit, or part of it.
In the latest on the trade front, the EU said it could reach an outline trade agreement with the United States in the coming days.
US President Donald Trump said on Tuesday that he was probably two days away from sending the EU a letter disclosing the tariff rate on its exports to the US
“Even though a letter could be sent... the hope of the market and the sign of the negotiations is that there is a willingness to find some common ground,” said Georgios Leontaris, chief investment officer for EMEA at HSBC Global Private Banking and Premier Wealth.
“That said, we don’t know exactly the terms that will be agreed. Therefore, we need to wait and see how the negotiations will play out in the coming days”.
With the deadline for deals extended to August 1, from July 9, investors remain hopeful for more flexibility and negotiations on the table. However, Trump declared there would be “no more extensions”.
Trump also announced plans to impose a 50% tariff on imported copper and said long-threatened levies on semiconductors and pharmaceuticals would be introduced soon.
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