European stocks on Tuesday closed at their highest level in about a month, with sharp gains registered at all of the major bourses, as China’s premier bolstered hopes that a global trade war can be averted.
German stocks led the gains, with Bayer AG soaring on positive deal news.
How markets are moving
The Stoxx Europe 600 SXXP, +0.83% rose 0.8% to 378.42, after finishing up 0.1% on Monday. If the pan-European benchmark holds at current levels, marking its highest finish since March 12.
Even stronger gains were seen for Germany’s DAX 30 DAX, +1.11% which climbed 1.1% to 12,397.32, also its best level since March 12. France’s CAC 40 PX1, +0.84% tacked on 0.8% to 5,307.56, the highest finish since Feb. 28. The U.K.’s FTSE 100 UKX, +1.00% jumped 1% to 7,266.75, achieving its highest finish since Feb. 27.
The euro EURUSD, +0.0405% traded at $1.2364, up from $1.2323 late Monday in New York. The Russian ruble USDRUB, -0.0592% continued to sell off on Tuesday, falling to 62.28 rubles against the U.S. dollar, for a drop of over 4%.
What’s driving markets
Europe was being swept along by a global equity rally after Chinese President Xi told the Boao Forum that Beijing is working on plans to improve access for foreign companies to financial and manufacturing sectors. They include a cut in tariffs on car imports and an improvement in protection of intellectual property, among other measures.
Worries about a global trade war have regularly acted as a weight on global stocks for weeks as the Trump administration and China exchanged tit-for-tat threats of levies. In recent days, though, investors have grown more optimistic as both sides took a more conciliatory tone.
Also on the geopolitical front, President Donald Trump said Monday he would soon make a “major” decision about how to respond to what he called a “heinous” chemical-weapons attack in Syria. The escalating tensions have fed concerns that renewed conflict could hinder oil output in the Middle East.
What strategists are saying
While China’s president had a few digs at Trump in his speech, “it was his comments on import tariffs, which he said would be ‘significantly’ lower for autos, and his promise that the country would do more to enforce intellectual property rights of international firms, ostensibly a key concern for Trump, that really caught the ear of the markets,” said Connor Campbell, financial analyst at Spreadex, in emailed comments.
“Now all Trump needs to do is avoid making any inflammatory, gains-derailing comments of his own,” Campbell added
Stock movers
Among the leading heavyweight gainers in Europe, Bayer AG BAYN, +3.05% surged 4.7%, after the U.S. Justice Department said it would allow the pharmaceutical and chemical group to go ahead with its $62.5 billion deal to buy Monsanto Co. MON, -0.11% The companies agreed to sell additional assets to secure that approval.
Trade hopes lifted auto makers, with Volkswagen AG VOW3, +3.91% up 4.5% and Daimler AG DAI, +1.14% up 1.2%.
Another big gainer in Europe, LVMH Moët Hennessy Louis Vuitton SE MC, +4.92% jumped 4.9% to a fresh all-time high after the luxury goods group posted forecast-beating first-quarter sales growth.
Royal Dutch Shell PLC RDS.A, +2.63% rose 2% and BP PLC BP, +2.69% BP., +2.36% gained 2.4% as crude oil prices surged CLK8, -0.17%
Raiffeisen Bank International AG RBI, +1.77% fell 1.8%. Russian-based shares came under pressure on Monday in reaction to weekend news of U.S. sanctions on the country. BNP Paribas SA BNP, +0.74% said Tuesday it will buy the core banking operations of Raiffeisen’s Polish unit for 775 million euros ($953 million). The French bank’s shares were up 0.7%.
Some Russian-related shares were recovering after Monday’s beatdown. Shares of steel and mining group Evraz PLC EVR, +1.12% which has operations in Russia, but London headquarters, rose 1.1%.
Mining stocks were up across Europe, gaining after Xi’s comments. China is a major buyer of industrial and precious metals. Heavyweight Rio Tinto PLC RIO, +3.10% RIO, +4.34% RIO, +1.32% led with a 3.1% gain, while BHP Billiton PLC BLT, +3.54% BLT, +3.54% added 2.7%.
Glencore PLC GLEN, +2.17% GLEN, +2.17% GLEN, +2.17% jumped 2.2%. The Anglo-Swiss mining and commodity-trading company said Chief Executive Ivan Glasenberg has stepped down as director of Russia-based United Co. Rusal PLC 0486, +7.14% which fell nearly 9% in Hong Kong after a 50% plunge on Monday in the wake of the latest U.S. sanctions.
