Breaking News
0

U.S.-China trade truce triggers European share surge

Stock MarketsDec 03, 2018 05:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The German share price index DAX graph at the stock exchange in Frankfurt

By Helen Reid

LONDON (Reuters) - Miners, autos, tech, and oil stocks surged on Monday, driving Europe's main benchmarks up strongly after U.S. and Chinese leaders agreed a temporary truce in a trade war.

Germany's DAX (GDAXI) – the most sensitive to China and trade war fears – led the way with a 2.6 percent rise to its highest level since Nov 14. The pan-European STOXX 600 (STOXX) climbed 1.8 percent, set for its strongest day in eight months.

U.S. President Donald Trump and Chinese President Xi Jinping reached a truce at the G20 meeting on Saturday, halting additional tariffs and agreeing to fresh talks aimed at reaching an agreement within 90 days.

Although markets reacted positively, some investors and analysts said there remained much for the two to agree upon.

"While President Trump described the bilateral meeting with China as "amazing and productive", we believe the rivalry between the U.S. and China will not be easily overcome, especially over the issue of intellectual property and market access," said UBS Wealth Management CIO Mark Haefele in a note.

Goldman Sachs (NYSE:GS) analysts said the announcement strengthened their view that "Trump is likely to want to conclude an agreement - even if it does not include a full rollback of tariffs - well ahead of the 2020 presidential election".

Financials were the biggest driver of European shares as China-exposed bank HSBC (L:HSBA) rose and investors cheered the prospect of a end to a trade war which has dented growth.

Mining stocks (SXPP) led the gains and were up 5.1 percent on the news which gives China, the world's biggest metals consumer, more wiggle room in the next few months.

Antofagasta (L:ANTO), Anglo American (L:AAL), and Glencore (L:GLEN) were up 6.2 to 8.6 percent.

Car stocks (SXAP), which have been battered by fears of rising tariffs, jumped 4.2 percent after Trump said China agreed to cut import tariffs on American-made cars.

German carmakers Daimler (DE:DAIGn), BMW (DE:BMWG), and Volkswagen (DE:VOWG_p) climbed 4.8 to 6.2 percent, while tire maker Continental (DE:CONG) gained 4.1 percent and Faurecia (PA:EPED) rose 6.9 percent.

Tech stocks (SX8P) jumped 3.1 percent with chipmakers the best-performing. Infineon (DE:IFXGn), STMicroelectronics (MI:STM), and AMS (S:AMS) gained 5.8 to 6.7 percent.

Overall analysts have cut their 2019 earnings growth expectations for world stocks over the past month as concern grew that a trade war would compound the impact of a slowing global economy.

The oil sector (SXEP) also jumped 2.7 percent as crude soared ahead of this week’s OPEC meeting, expected to result in a supply cut.

Luxury stocks highly sensitive to China were also among top gainers, with heavyweight conglomerate LVMH (PA:LVMH) up 5.9 percent and Gucci owner Kering (PA:PRTP) rising 6.1 percent.

Away from the trade war relief, shares in French supermarkets Carrefour (PA:CARR) and Casino (PA:CASP), underperformed after riots in Paris on Saturday.

Carrefour was down 1.1 percent and Casino was up just 0.5 percent, while France's main CAC 40 rose 2 percent.

Argenx (BR:ARGX) topped the STOXX with an 11.3 percent gain after the Netherlands-based biopharma company said it signed a deal worth potentially up to $1.6 billion with Johnson & Johnson (NYSE:JNJ) affiliate Cilag to develop its Cusatuxumab drug in certain types of cancer.

Graphic: global earnings growth expectations dec 3 - https://tmsnrt.rs/2Q9fNPZ

U.S.-China trade truce triggers European share surge
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Faisal Turkistani
Faisal Turkistani Dec 03, 2018 5:41AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You lost all our money because of US in China trade haaaaa
Reply
0 0
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email