European stock markets climb, as pound falls back

• Speculation that President Trump will defer making a decision whether to slap tariffs on EU vehicle imports this week has boosted sentiment in European equity markets.
• The Trump administration has softened its stance in relation to the EU in recent months.

LONDON: European stock markets rose Tuesday, helped by speculation that US President Donald Trump will defer a tariffs decision on European-made cars, while the pound retreated once more after a bounce.

"Speculation that President Trump will defer making a decision whether to slap tariffs on EU vehicle imports this week has boosted sentiment in European equity markets," said David Madden, analyst at CMC Markets UK.

"The Trump administration has softened its stance in relation to the EU in recent months, which has been a factor in the rally in European stocks.

"The White House has until tomorrow to make its call, and there is talk the decision will be pushed back. Traders are cautiously optimistic, hence why stocks are higher," Madden added.

After postponing such measures in May, Trump was to decide by mid-November whether to impose the supplemental tariffs on cars built in EU countries -- a step particularly feared by big German automakers.

The outgoing president of the European Commission Jean-Claude Juncker last week said he believed the US would not impose new tariffs on imported European cars in the coming days.

In foreign exchange deals Tuesday, the pound retreated a day after winning support from news that the Brexit party would not run against UK Prime Minister Boris Johnson's Conservatives in hundreds of seats at next month's general election.

The dollar was up also versus the euro and yen.

Elsewhere, Hong Kong's main stocks index closed up 0.5 percent after heavy losses.

Traders moved cautiously however after stocks plunged more than two percent Monday when the city was wracked by some of the worst violence seen during months of protests, with one person shot and another set on fire.

The city remains on edge -- with sporadic protests taking place on Tuesday -- while the US expressed "grave concern" over the situation in Hong Kong and called for restraint by security forces and protesters.

"It is still very unclear what can de-escalate the situation," said National Australia Bank's Tapas Strickland.

"Nevertheless, for as long as Beijing gives Hong Kong latitude to deal with the protests, it is likely the unrest will only have an isolated impact on financial markets."

Key figures around 1230 GMT

London - FTSE 100: UP 0.4 percent at 7,356.83 points

Frankfurt - DAX 30: UP 0.6 percent at 13,277.04

Paris - CAC 40: UP 0.3 percent at 5,909.18

EURO STOXX 50: UP 0.4 percent at 3,710.80

Tokyo - Nikkei 225: UP 0.8 percent at 23,520.01 (close)

Hong Kong - Hang Seng: UP 0.5 percent at 27,065.28 (close)

Shanghai - Composite: UP 0.2 percent at 2,914.82 (close)

New York - Dow: FLAT at 27,691.24 (close)

Pound/dollar: DOWN at $1.2834 from $1.2855 at 2100 GMT

Euro/pound: UP at 85.86 pence from 85.83 pence

Euro/dollar: DOWN at $1.1016 from $1.1033

Dollar/yen: UP at 109.20 yen from 109.05 yen

Brent North Sea crude: UP 0.4 percent at $62.42 per barrel

West Texas Intermediate: UP 0.4 percent at $57.10 per barrel