Europe: Stocks shrug off trade worries with quarterly gain

[LONDON] European shares ended a decent quarter with a bounce on Friday, enjoying a respite from trade war fears after China eased foreign investment limits.

The pan-European STOXX 600 was up 0.8 per cent at its close, while Germany's trade-sensitive DAX jumped 1.1 per cent.

The escalation of the United States' trade dispute with China and the European Union had taken its toll on European shares in June, with the index down 0.8 per cent this month. However, that still left it with a 2.4 per cent gain in the second quarter.

A deal struck by EU leaders on immigration in the early morning also help improved sentiment and triggered a jump in the euro.

"The migrant crisis in Europe threatened German Chancellor Angela Merkel's fragile coalition, which was in danger of collapsing if she left the summit without a deal," commented Jasper Lawler, head of research at London Capital Group.

The tech sector, which was hard hit during the week as worries about global trade grew, also enjoyed a strong rebound with a 1.6 per cent rise.

German lighting group Osram which plunged over 20 per cent during the previous session after slashing its profit guidance, recouped some of its losses, rising 5.8 per cent.

Banks were also on the rise. Spain's Caixabank gained 3.3 per cent after announcing the sale of its real estate business.

Deutsche Bank rose about 1.8 per cent despite failing a US stress test.

"This was expected, in our view, and we see no material change to our view," Goldman Sachs said in a note.

As a whole, while the European banking sector was up 0.6 per cent on the day, it remains one of the worst performers of 2018 with a decline of more than 12 per cent since the beginning of the year.

Among fallers, Belgium's Galapagos helped bring up the rear with a loss of 4.4 per cent. The stock regained of its earlier losses following disappointing drug trial results.

REUTERS