Europe: Shares reach two-week high after Nafta deal; autos rally

[LONDON] European shares rallied on Tuesday after the United States and Mexico reached a trade agreement, with autos enjoying another day of gains on an otherwise quiet day for company news.

The pan-European STOXX 600 index was up 0.3 per cent by 0720 GMT, hitting a two-week high, while Germany's exporter-heavy DAX gained 0.3 per cent.

Britain's FTSE 100 rose 0.6 per cent following Monday's holiday, helped by a subdued sterling.

European autos posted some of the biggest gains, up 1 per cent after the United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (Nafta) . That puts pressure on Canada to agree to new terms on auto trade and dispute settlement.

Mining shares were also big risers, up 1.3 per cent.

Among individual stocks, shares in Danish brewer Royal Unibrew topped the STOXX with a 4.8 per cent gain after the company raised its outlook for the third time this year.

Shares in Sydbank fell 5.8 per cent, however, after the Danish bank reported second-quarter earnings.

REUTERS