European shares started the week on a positive note on Monday, which earn back the losses of the previous session, because the markets generated a sigh of exemption after the US President Donald Trump postponed his threat to impose a 50% rate on the region.
The Pan-European Stoxx 600 index closed 1% higher. It had lost 0.9% on Friday after Trump unexpectedly called for competitive rates for the European Union goods, and said that the negotiations with the region did not move fast enough.
On Sunday, Trump extended the deadline for rates until 9 July of 1 June, after chairman of the European Commission Ursula von der Leyen said that the block 27 countries needed more time to produce a deal.
The cars and parts index, sensitive to rate -related pressure, led wider profit with an increase of 1.8%. However, they were limited by a decrease of 3.3% in Porsche.
Defense companies were one of the largest boosts of the Stoxx 600 index, where Rheinmetall and Leonardo each won more than 3% and resulted in the space and defense index 1.7%.
The shares also attracted the industrial goods and service sector by 1.5%.
The Defense and Auto sectors helped to rise by 1.7%German shares, near a record high.
Luxury shares, strongly exposed to the American market, have also won. Shares of Kering, LVMH and Richemont each rose approximately 1%, just like the wider index
“Although more time for EU-US negotiations is good news, the speed of the rebound in shares is that investors may have become too optimistic on the path for trade discussions,” said Mark Haefele, Chief Investment Officer at UBS Global Wealth Management.
The euro jumped together with other risk-sensitive currencies, while the returns of the eurozone bonds were not changed much because Trump went back to his tariff threats.
Increasing concern about the American economic delay and tax misery, underlined by Moody’s creditworthiness -downgrade on 16 May, urges investors to limit their exposure to American assets.
“If you want a portfolio with a low risk, the US you would first go is, but with the trade stresses and geopolitical tensions this favorable sentiment has shifted,” said Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank.
Trade volumes were lighter than normal due to holidays in the US and the British markets. However, the American stock futures each rose by more than 1%.
Thyssenkrupp jumped by 8.8% after a weekend report said that the maker of the submarine and car component maker is planning to hold a shareholders’ meeting on 8 August to properly approve an expected spin-off of its warship department. Thyssenkrupp was not immediately available for comment.
Zeeland pharmaceutical pharmaceutical tribe De Stoxx 600 with a progress of 10%.
—Nikhil Sharma and Purvi Agarwal, Reuters
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