[BENGALURU] European shares surged on Friday (May 2), capping off a week filled with earnings across the continent, as signs of a potential de-escalation of trade tensions between the US and China and a stable jobs report in the US aided risk-taking.
The pan-European Stoxx 600 index closed 1.7 per cent higher, hovering near its closing level of Apr 2 – before global markets were roiled by US President Donald Trump’s now-delayed “reciprocal” tariffs on most trading partners.
Most regional bourses registered gains, with German blue chips leading the pack with a 2.6 per cent increase for the day.
Among the Stoxx sub-sectors, technology soared 3.4 per cent, while industrials added 3 per cent.
Global stocks initially rose after China’s Commerce Ministry said that Beijing was “evaluating” an offer from Washington to hold talks over Trump’s 145 per cent tariffs and that Beijing’s door was open for discussions.
Equities received a further boost after data showed US job growth slowed marginally in April and the unemployment rate held steady at 4.2 per cent, assuaging fears that the world’s biggest economy was close to recession after first quarter gross domestic product data had shown a sharp contraction.
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“The employment figure gives the administration more breathing room in its trade negotiations, as risk assets are likely to respond favourably,” said Kevin O’Neil, associate portfolio manager at Brandywine Global.
Back in Europe, fresh data showed eurozone prices rose more than expected last month and underlying price pressures accelerated, though that was not expected to deter the European Central Bank (ECB) from cutting interest rates.
“The market has been taking a doveish view for the ECB following recent events… so, while a further cut in June seems all but given, the chances of a 50 basis points cut seem low for now, and the path for rates further out might be less clear than the market thinks,” HSBC economists said.
Dutch lender ING advanced 7.4 per cent after posting stronger-than-expected first-quarter profit and announcing a two billion euro (S$2.9 billion) share buyback. Danske Bank gained 6 per cent after Denmark’s biggest lender reported forecast-beating first-quarter profits.
Shell rose 2.1 per cent after the oil major reported a 28 per cent drop in first-quarter net profit – though it beat analysts’ expectations.
Airbus added 5.3 per cent after the planemaker topped quarterly estimates across the board and reaffirmed its annual outlook.
Topping gains on the Stoxx 600 was Cofinimmo, jumping 10.4 per cent after peer Aedifica launched a takeover offer with a “significant premium” on the Belgian real estate investment trust. Shares of Aedifica fell 2.9 per cent. REUTERS
