European shares edge higher

European shares edged higher on Tuesday after German Chancellor Angela Merkel’s conservatives settled a row over migration and gave some respite to investors facing a rage of political worries including trade tensions with the United States.

The pan-European STOXX 600 was up 0.6 percent by 0833 GMT with Germany’s DAX posting the best performance with a 0.9 percent rise. The dispute over immigration had threatened to topple Merkel’s fragile governing coalition but in a breakthrough late on Monday evening, her rebellious interior minister dropped his threat to resign after five hours of talks.

Asian shares, which had sustained heavy falls overnight, particularly in China, recouped some of their losses before European bourses opened, helping restore sentiment. Chinese financial markets have been jittery ahead of a July 6 deadline, when the U.S. is set to slap tariffs on $34 billion worth of Chinese goods that Beijing has vowed to match with tariffs on U.S. products.

Japanese shares slipped to near three-month lows on Tuesday in choppy trade on growing worries the new tariffs the United States and China have threatened to impose on each other will kick in at the end of this week. The Nikkei average ended down 0.12 percent at 21,785.54. At one point it dropped as much as 1.1 percent to 21,574, its lowest level since mid-April.

Oil futures were on the rebound, on the heels of a pullback led by the Brent benchmark, as investors pushed aside higher output concerns and refocused on a potential lack of supply. Oil prices paused on Monday, with the bulk of a pullback seen in Brent crude prices, which fell 2.4%. The market was partly rattled by a weekend tweet from President Donald Trump who said that he had asked Saudi Arabia to pump even more oil into the market, though the White House later walked back his comments.