Stocks at six-week high on EU/US deal

EUROPEAN shares rose to a six-week high yesterday as hopes of a breakthrough in US-EU trade talks boosted car-makers, while the market also digested a flurry of company earnings reports.

The pan-European STOXX 600 index ended up 0.9pc, further supported late in the session by a fall in the euro after ECB President Mario Draghi reaffirmed a commitment to keep interest rates low through next summer.

Germany’s exporter-heavy DAX, which has come under pressure due to uncertainty over global trade relations, rose 1.8pc, its biggest one-day gain since early April.

The rally followed Wednesday’s meeting between European Commission President Jean-Claude Juncker and Donald Trump, in which the US President agreed to refrain from imposing tariffs on European cars while the two sides look to cut other trade barriers, easing the threat of a transatlantic trade war. “Investors will be cautiously optimistic in respect of the announcement yesterday, but will also remember what happened with respect to China,” Alastair George, investment strategist at Edison, said.

Earlier this month Washington threatened to impose tariffs on another $200bn (€171bn) worth of Chinese imports, rapidly deteriorating relations with Beijing after signs earlier in the year that the two countries were set to negotiate a compromise.

European car-makers were the biggest sectoral gainers, up 2.6pc. The sector has been hit particularly hard, with tariff threats forcing car-makers on both sides of the Atlantic to cut their guidance.

In Dublin, the Iseq closed up, with both AIB and Bank of Ireland closing stronger ahead of interim results today and Monday, respectively.