European stocks reverse early falls

EUROPEAN shares recovered rapidly from a weak start yesterday after reports that US President Donald Trump plans new 10pc tariffs on $200bn (€171bn) of Chinese imports, with investors focusing on strong results. Despite China’s Foreign Ministry also saying it would respond to Trump’s threat, an early fall across European benchmarks all but evaporated.

The pan-European STOXX 600 reversed early losses to rise 0.12pc, while Germany’s DAX, home to large exporters and carmakers, struggled. Chinese stocks had fallen to their lowest close in nearly four years overnight.

“I think the market has digested more or less all this rollercoaster with tariffs,” said Dimitrios Stefanopoulos, portfolio manager at AlphaTrust in Athens, adding that investors believe Mr Trump will seek a deal ahead of US mid-term elections.

The market was buoyed by strong defensive telecoms and utilities stocks. Cyclicals sectors, which are more sensitive to trade and economic growth, have lagged as the trade war ramped up over the past months.

“If the trade war hits the economy, then defensives will be better off,” said Mr Stefanopoulos.

In Ireland, the Iseq Overall Index gained 0.5pc to end the session at 6,671.42.

Movers included packaging giant Smurfit Kappa, which advanced 2.5pc to €35.08. Ryanair was up 2pc at €13.48 as it braces for its annual general meeting on Thursday.

Permanent TSB was up 1.4pc at €2.10, while FBD fell almost 1pc to €10.40.

The UK’s Ftse-100 ended the day flat, while Germany’s DAX fell 0.2pc. France’s CAC-40 was down very slightly.