Europe shares rev up as auto sector jumps on report of softer U.S. tariffs

By Shashwat Chauhan, Nikhil Sharma and Pranav Kashyap

(Reuters) -European markets closed higher on Monday, as investor optimism was fuelled by a report suggesting that U.S. tariffs might be less severe than previously feared, boosting the automobile sector.

Europe's premier index, STOXX 600 , closed up 0.9%, at its highest level in more than two weeks.

Major bourses across the region jumped, with France's CAC 40 up 2.2%, Germany's DAX up 1.5%, and Spain's IBEX 35 up 1.3%.

The auto sector surged nearly 3%, marking its best performance in over a year.

This surge came in response to a Washington Post report indicating that President-elect Donald Trump's team is considering a tariff strategy that would target only essential imports, potentially easing the pressure on European car manufacturers.

However, Trump later denied the report.

"It looks as if officials are already preparing to water down the worst of Trump's campaign promises by narrowing the scope of the tariffs," said Kyle Chapman, FX markets analyst at Ballinger Group.

"That means a lower footprint on global trade, a smaller impact on U.S. inflation, less restriction on the Fed's cutting cycle, and a smaller negative growth shock for the global economy versus what the market had been preparing for." 

Luxury brands with strong ties to China also rode the wave of optimism, with LVMH, Hermes, Kering (EPA:PRTP ) and Richemont (SIX:CFR ) rising between 2.4% and 4.5%.

Meanwhile, the technology sector advanced 3.9%, led by ASML (AS:ASML ), ASMI and STMicroelectronics.

These companies were buoyed by Microsoft (NASDAQ:MSFT )'s announcement of a substantial $80 billion investment in data centres for AI model training by 2025.

As investors look ahead, the week promises a flurry of economic data, with inflation reports expected from across Europe.

Initial figures from Germany have already shown a higher-than-anticipated rise in inflation. Additionally, Germany's service sector experienced a slight uptick, even as the broader euro zone saw overall activity contract for a second consecutive month.

This week's centrepiece would be the December U.S. nonfarm payrolls report on Friday, a crucial metric to assess the Federal Reserve's interest rate path for 2025.

European equities lagged their U.S. counterparts in 2024, as concerns about a slowing economy, political turmoil in Germany and France and the threat of tariffs from the Trump administration made for an uncertain outlook.



Among individual movers, Rolls-Royce (OTC:RYCEY ) fell 2.6% after Citigroup (NYSE:C ) downgraded the rating on the British engineering company to "neutral" from "buy".

With the holiday season winding down, trading floors are set to buzz back to life this week as investors and market participants return, promising a resurgence in trading volumes after two weeks of subdued, holiday-affected activity.

Source: Investing.com

Publicații recente
Oklo target nearly doubled at Wedbush on AI-driven demand for nuclear energy
24.01.2025 - 18:00
Crypto markets lose steam after Trump's first policy move
24.01.2025 - 18:00
Combination of Google's TPU-DeepMind units may be worth $700 bn - DA Davidson
24.01.2025 - 18:00
British American Tobacco, Altria shares rise after menthol ban proposal dropped
24.01.2025 - 18:00
Morocco stocks higher at close of trade; Moroccan All Shares up 0.34%
24.01.2025 - 18:00
Commerzbank says no talks with UniCredit until specific proposal made
24.01.2025 - 18:00
Venture Global aims for $64 billion valuation at debut in test for energy IPOs
24.01.2025 - 18:00
Intuitive Machines stock surges on NASA contract award
24.01.2025 - 18:00
International Paper's $7.2 billion acquisition of DS Smith gets EU approval
24.01.2025 - 18:00
Short-term stock optimism soars among retail investors, AAII survey shows
24.01.2025 - 18:00
Venture Global shares likely to open up to 6% above IPO price
24.01.2025 - 18:00
Intuitive Surgical, American Express Stir Friday's Market Cap Stock Movers
24.01.2025 - 18:00
BMW joins Chinese EV makers in filing EU court challenge to tariffs
24.01.2025 - 18:00
Turkey stocks lower at close of trade; BIST 100 down 0.08%
24.01.2025 - 18:00
Diageo stock jumps on possible Guinness sale
24.01.2025 - 18:00

© Analytic DC. All Rights Reserved.

new
Analiza pieței Cum va afecta raportul NFP de mâine cursul de schimb al dolarului american?