European shares at near three-week highs as US-China trade tiff appears to ease

FRANKFURT: European shares climbed to a near three-week high on Wednesday, boosted by strong earnings from Europe’s largest software maker SAP, while easing trade tensions between the United States and China lifted investor sentiment globally.

The pan-European STOXX 600 index ended 1.8% higher. Germany’s blue-chip index outperformed local peers to climb 3.1%.

SAP jumped 10.6% to mark its best day in six years after the German company topped analysts’ first-quarter profit expectations, lifting the European technology sector up 3.9%.

Basic resources sub-index was also a stand-out, soaring 3.3%, as prices of base metals like copper climbed on easing worries about trade tensions between the US and China.

A source familiar with the matter told Reuters that the Trump administration would look at lowering tariffs on imported Chinese goods pending talks with Beijing, adding that any action would not be made unilaterally.

The source’s comments followed a Wall Street Journal report that the White House is considering cutting its tariffs on Chinese imports in a bid to de-escalate tensions.

US Treasury Secretary Scott Bessent also said that he believes there will be a de-escalation in US-China trade tensions, but described future negotiations with Beijing as a “slog” that has not started yet.

“Markets are really hoping that the worst will not happen and are really giving a chance to negotiations and less tariffs being implemented,” said Amelie Derambure, senior multi-asset portfolio manager at Amundi. “That’s an important element which is lifting US equities, but also as a consequence, global equities including European ones.”

Uncertainty over US tariffs continues to cloud the outlook for European corporate health. European companies are now expected to post a 3.5% decline in their first-quarter earnings — the weakest performances in two years — according to data compiled by LSEG IBES.