Europe: Shares rise as US-EU trade breakthrough spurs carmakers

[LONDON] European stocks jumped in early trading on Thursday following a breakthrough in US-EU trade talks, buoying shares in carmakers as the market digested a flurry of company earnings reports.

The pan-European STOXX 600 was up 0.4 per cent by 0720 GMT, while Germany's exporter-heavy DAX, which has come under pressure due to uncertainty over global trade, rose 1 per cent.

The rally followed Wednesday's meeting between US President Donald Trump and European Commission President Jean-Claude Juncker, in which the US president agreed to refrain from imposing tariffs on European cars while the two sides launch negotiations to cut other trade barriers, easing the threat of a transatlantic trade war.

European autos were the biggest sectoral gainers, up 1.5 per cent. The sector has been hit particularly hard, with tariffs forcing carmakers on both sides of the Atlantic to cut their guidance.

Shares in Fiat, Porsche, Volkswagen and BMW all rose by between 2.9 and 4.3 per cent.

Daimler, however, dipped 0.1 per cent after its second-quarter profit was hit by weaker pricing and tariffs.

On a busy day of earnings, a number of market heavyweights saw some decent-sized share price moves. British American Tobacco, Smith & Nephew, RELX and AstraZeneca all rose by between 1.9 per cent and 4.5 per cent after giving updates, topping the FTSE 100 which inched 0.1 per cent higher.

Airbus led France's CAC with a 5.4 per cent gain after the aerospace group's second-quarter core profit doubled.

Nokia was among the biggest STOXX fallers, tumbling 8.7 per cent after reporting weak profits, while Kion was down nearly 7 per cent after its results.

REUTERS