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May 15, 2019

Europe I Europe Markets Closing Report I European stocks close higher after Trump delays auto tariffs

Elliot Smith

European stocks made a comeback to trade higher Wednesday on news that President Donald Trump plans to delay the implementation of auto tariffs.

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European STOXX 600 was up 0.2% in afternoon trade. Autos jumped nearly 2 percent higher after being the weakest sector in earlier trade.
Three sources told CNBC the administration will delay those levies by up to six months. The news, which was first reported by Bloomberg News, sent auto stocks higher. Fiat C
Recent sessions saw a recovery rally across all major markets following a sell-off Monday on the back of China hiking tariffs on $60 billion worth of U.S. goods in an escalation of the trade war between the world’s largest economies. However, European markets failed to maintain Tuesday’s momentum with losses growing throughout the session.
Strategists have urged caution as tensions ratchet up, with the Federal Reserve Bank of New York’s gauge of recession probability over the next 12 months now at 27.5%, the highest since the financial crisis. Stateside, investors will continue to monitor ongoing talks after President Donald Trump softened his tone on the trade war Tuesday, referring to it as a “little squabble” and insisting talks had not collapsed.
Back in Europe, the U.K. government announced that Prime Minister Theresa May will bring her Brexit deal back to Parliament in the week of June 3, as talks with the main opposition Labour party continue despite an apparent lack of progress.
Meanwhile, in a substantial piece of corporate news, reports Tuesday suggested Italian bank UniCredit has stepped up preparations to bid for Commerzbank, just weeks after talks a deal with previous suitor Deutsche Bank fell through. Commerzbank shares traded 2.9% lower Wednesday afternoon.
Dutch bank ABN Amro reported a 20% drop in first-quarter net profit to 478 million euros ($536 million). Its stock recovered to a 0.5% rise during afternoon trade.
Credit Agricole also posted falling first-quarter net profits with an 11% decline to 763 million euros, its stock falling 3.5% by mid-afternoon.
Shares of British lender CYBG were up 4.3% at during the session after it swung to a first-half profit, while the worst early performer was German internet company United Internet, which fell 9.2% after its first-quarter results.
Embattled German industrials giant Thyssenkrupp dropped 8.8% during the afternoon session, almost erasing gains made after the company announced plans to spin off its elevator business on Friday. The fall came after union IG Metall demanded a concept from the company’s management.
Germany announced a return to economic growth in the first quarter Wednesday, a development Economy Minister Peter Altmaier told Reuters was a “first ray of hope” following two quarters without expansion.

Source: CNBC

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