European shares rebounded on Tuesday after touching a two-month low in the previous session, although the sentiment remained cautious ahead of the impending U.S. reciprocal tariffs.
All major European sectors advanced, led by the defensive healthcare stocks rising 1%, underscoring investors’ nervousness.
Heavyweight Novo Nordisk firmed 2.1%, offering the biggest boost to markets, after nine straight sessions of losses.
The pan-European STOXX 600 index gained 0.6%, as of 0803 GMT, a day after shedding 1.5% as fears that an escalating trade war would cause a global economic slowdown prompted a flight from riskier assets.
The White House is due to announce on Wednesday a new round of reciprocal levies.
The benchmark index has dropped 5% from its early March record high but ended the quarter higher, as Germany’s historic fiscal package and the prospects of slowing U.S. economic growth attracted investors to the region.
“The European narrative has shifted from the optimism from the strong government spending to a potential negative impact of these tariffs on company earnings,” Swissquote Bank senior market analyst Ipek Ozkardeskaya said.
European shares hits a weekly decline as tariff worries persist
“What we see today is rather a correction than optimism. Uncertainties and the tense sentiment continue into tomorrow’s tariff announcement.”
Goldman Sachs cut its 12-month forecast for the European benchmark index to 570 points from 580 earlier due to potential impact of the U.S. tariffs.
The euro zone’s long-suffering manufacturing industry showed initial signs of a meaningful recovery last month, according to a latest survey.
Investors will also assess the euro zone’s inflation numbers due at 0900 GMT, a day after data showed that German inflation fell more than expected in March, bolstering the case for further interest rate cuts by the European Central Bank.
Comments from ECB President Christine Lagarde and board member Philip Lane are also awaited later in the day.
Bavarian Nordic rose nearly 1.8% after the Danish biotechnology company said the U.S. Food and Drug Administration had approved a freeze-dried formulation of its mpox and smallpox vaccine.
Italy is considering raising the ownership thresholds that trigger mandatory takeover bids in public companies, three sources familiar with the matter told Reuters.
This would have significant implications for firms such as Telecom Italia (TIM), in which state-backed financial conglomerate Poste Italiane is set to become the top investor with a 24.8% stake.
TIM shares firmed 0.6%, while Poste Italiane added 0.4%, underperforming the broader market, which rose 0.7%.
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