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

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[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.

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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