European shares bounced off 14-month lows in early trading on Tuesday after four straight sessions of heavy selling, although investors’ mood remained sensitive to tariff-related developments.
The pan-European STOXX 600 rose 1% by 0709 GMT, after shedding 12.1% in just the past four sessions as investors worried about a possible global recession triggered by the recent escalation in the trade war.
As of Monday’s close, the index declined 17.9% from its all-time high hit on March 3.
Germany’s benchmark rose 0.8% after the index stopped short of confirming a bear market in the previous session.
The European Commission proposed counter-tariffs of 25% on a range of US goods on Monday as the 27-member bloc struggles with tariffs on autos and metals already in place, and faces a 20% tariff on other products on Wednesday.
European shares close at over 14-month low as trade war volatility grips markets
The banks index rose 1%. Meanwhile, investors piled into defence shares, the best performing sector this year, lifting the index 3%.
Infineon Technologies fell 1.6% after the German chipmaker said it would buy Marvell Technology’s automotive ethernet business for about $2.5 billion in cash, to expand its microcontroller segment.