European Shares Gain After Trump Delays Tariffs on EU, Citing Deal Prospects
Pan-European STOXX 600 index closed 1 percent higher. It lost 0.9 percent on Friday following Trump abruptly demanded a hefty increase in tariffs on the goods of Europe. European Union, saying that talks in the Middle East weren't progressing quickly enough.
European Shares Gain After Trump Delays Tariffs on EU, Citing Deal Prospects
European shares kicked off the week with gains on Monday, reversing earlier declines. markets breathed a sigh relief following U.S. President Donald Trump put off his threats to put the 50 percent tariff on the region.
The European pan STOXX 600 index closed 1 percent higher. It was down 0.9 percent on Friday following Trump abruptly demanded a hefty increase in tariffs on products from within the European Union, saying that talks in the Middle East weren't progressing in a fast enough manner.
On Sunday the former president Trump put off the enactment of Donald Trump tariffs until July 9, the deadline after a statement from European Commission President Ursula von der Leyen, who said that the 27-member group needed additional time to come to an agreement.
The index for automobiles and components which is sensitive to pressures from European Union tariffs and broader economic pressures, led gains overall by registering the index registering a 1.8 percent increase. However, these gains were offset by an 3.3 percentage drop in Porsche .
Defence firms are among the largest boosts in the STOXX 600 index, with Rheinmetall and Leonardo increasing by more than 3percent each, as well as the aerospace and defence index increasing by 1.7 percentage.
The shares also increased the industry-related goods and services sector by 1.5 percent.
The auto and defense sectors contributed to German stocks to rise by 1.7 percent, which is close to an all-time high.
Luxury stocks, that are heavily at risk of being impacted by market risk, particularly the U.S. market, also rose. Porsche stock including Kering, LVMH, and Richemont, along with Porsche, saw gains of approximately 1% across the broader index
"While the prospect of more time for EU-U.S. discussions is great news, the pace of the rise in stock prices suggests that investors be overly optimistic about the way forward for EU-U.S. trade talks," said Mark Haefele Chief Investment Officer at UBS Global Wealth Management.
