FRANKFURT: European shares started the week on a positive note on Monday after the United States and China agreed to temporarily slash tariffs, providing some relief to global markets roiled by the trade war.
The US will cut extra tariffs on Chinese imports to 30% from 145% and Chinese duties on US imports will fall to 10% from 125% for the next 90 days, as per the deal.
The pan-European STOXX 600 index closed 1.2% higher, while regional bourses including ones in Germany and the UK were up.
“The deal is a step towards something that’s much better... The worst-case scenarios that investors were pricing in April seem to have been lifted over recent weeks as there’s been a softening of rhetoric,” said Patrick Armstrong, chief investment officer at Plurimi Wealth.
Traders reduced bets on interest rate cuts from the European Central Bank after the deal, with the reduced odds also aided by ECB board member Isabel Schnabel’s remarks.
The easing in tensions has relieved financial markets about worries over global economic growth, and signs of the de-escalation helped the European equities recover their sharp losses from early April.
Sportswear makers Puma and Adidas closed 6.5% and 3.8% higher, while logistics companies Maersk and Hapag-Lloyd advanced 11.2% and 13%, respectively.
Basic metal miners were the top gainers, up 5% after the deal buoyed prices of industrial metals.
Most healthcare heavyweights such as Roche Holding, Sanofi and AstraZeneca had dipped earlier in the day, after US President Donald Trump planned to sign an executive order to cut prescription drug prices to the level paid by other high-income countries.
Comments
Comments are closed for this article.