Europe: Shares close at four-week high on banks boost; US trade talks in focus
EUROPEAN shares closed at a four-week high on Wednesday, with banks the biggest boost as investors awaited signs of progress on a trade accord between the United States and the European Union.
The pan-European Stoxx 600 index rose 0.78 per cent to 549.96, its highest close since June 12. Italy’s bank-heavy benchmark jumped 1.6 per cent to its highest since 2007.
Lender UniCredit was among the biggest gainers on the index, advancing 4.6 per cent to its highest since 2011. The Italian lender met renewed German opposition to its takeover ambitions for Commerzbank after it doubled its voting stake in the rival.
A broader gauge of euro zone banks climbed 2.7 per cent to its highest level since 2010, with French bank Societe Generale also advancing 4 per cent.
The index tracking European defence companies gained 1.4 per cent to reach an all-time high.
German defence contractor Renk added 5 per cent after a Bloomberg report said the company was considering selling its civilian industrial unit, or part of it.
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In the latest on the trade front, the EU said it could reach an outline trade agreement with the United States in the coming days.
US President Donald Trump said on Tuesday that he was probably two days away from sending the EU a letter disclosing the tariff rate on its exports to the US.
“Even though a letter could be sent... the hope of the market and the sign of the negotiations is that there is a willingness to find some common ground,” said Georgios Leontaris, chief investment officer for EMEA at HSBC Global Private Banking and Premier Wealth.
“That said, we don’t know exactly the terms that will be agreed. Therefore, we need to wait and see how the negotiations will play out in the coming days”.
With the deadline for deals extended to Aug 1, from July 9, investors remain hopeful for more flexibility and negotiations on the table. However, Trump declared there would be “no more extensions”.
Trump also announced plans to impose a 50 per cent tariff on imported copper and said long-threatened levies on semiconductors and pharmaceuticals would be introduced soon.
Shares in some European pharmaceutical companies fell, including Zealand Pharma falling 2.7 per cent and Novo Nordisk losing 1.5 per cent.
At the bottom of the Stoxx 600 stood British ad group WPP, which tumbled 18.8 per cent after slashing its profit outlook. French rival Publicis also fell 1.8 per cent.
Norwegian engineering group Kongsberg dropped 12 per cent as analysts said they saw some weaknesses in different parts of the results.
On the bright side, EssilorLuxottica jumped 5.6 per cent following reports that Meta Platforms has acquired a nearly 3 per cent stake in the eyewear maker. REUTERS
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