European shares reach six-week highs
European shares rose to sixweek highs on Wednesday, as China eased trade worries by saying it would exempt some U.S. goods from additional tariffs, with eyes also moving to a European Central Bank meeting expected to deliver more economic stimulus.
Euro zone stocks were up 0.5% at 0831 GMT, with investors piling into banks, miners and auto parts shares for a second day. Germany’s trade-sensitive DAX rose 0.6%, while London’s FTSE 100 jumped 0.9% and led the wider pan-European STOXX 600 index higher.
In the latest sign that tensions with the United States could be cooling, China’s finance ministry said 16 types of U.S. goods would be exempted from additional retaliatory tariffs effective 17 September.
Markets now await a response to China’s move from Washington after months of tit for tat moves that have hurt global growth and spurred a handful of stock market sell-offs.
All of the major European indexes have recouped losses sustained in a rough August for markets, with the STOXX up about 7% since touching a low of 361.07 last month. However, analysts were still far from predicting that a U.S.-China trade deal could be struck this year.
All eyes are now on the ECB’s monetary policy meeting on Thursday, where it is widely expected to cut interest rates and restart an asset purchase program at a time when the euro zone’s main economy - Germany - is slipping toward recession.
On the corporate front Zara owner Inditex fell 2.4% and was among the biggest decliners on the pan-regional benchmark after it reported weaker-thanexpected growth in profit margins in the first half of the year. Italian shares rose 0.6%, recovering from a fall in the last session. Trade-reliant tech stocks were boosted by a rally in the shares of European suppliers to Apple Inc after the iPhone maker launched its latest models on Tuesday.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.