Autos push European shares higher

A strong rise across autos boosted European shares on Thursday, as hopes over a softening in U.S. trade rhetoric lifted the sector, though trading remained cautious ahead of a U.S. deadline to impose tariffs on Chinese goods.

The pan-European STOXX 600 index was up 0.4 percent by 0859 GMT, while Germany’s exporterheavy DAX rose 1 percent, supported by autos. European stocks have traded in a narrow range this week in anticipation of U.S. tariffs on $34 billion of Chinese imports set to go into effect on Friday.

Sectors which have been particularly hit by the uncertainty over the trade rift made some headway on Thursday, with autos jumping 3.2 percent, while basic resources rose 1.3 percent and banks were up 1.1 percent.

German autos BMW, Daimler, Porsche and Volkswagen were among the biggest STOXX risers, up as much as 4.7 percent following a report about a U.S. offer to suspend threats to impose tariffs on cars imported from the European Union.

Autos have struggled in 2018 and remain down 8 percent for the year, among the worst-performing sectors in Europe.

Japan’s Nikkei share average closed at a three-month low on Thursday as trade tensions spooked investors while shares of banks and firms that benefit from inbound tourism languished. Investors were jittery ahead of Friday, when U.S. tariffs on $34 billion of Chinese imports are set to kick in. China has said it will retaliate with tariffs on U.S. products.

Emerging stocks fell for a fourth straight session on Thursday as a deadline neared for Washington to impose tariffs on $34 billion of Chinese goods, with Beijing set to retaliate in kind. MSCI’s benchmark emerging equity index was down 0.3 percent, reflecting growing fears the tit-for-tat tariffs will hit exporters in other countries as the World Trade Organization warned the effects were already starting to show.