By Shashwat Chauhan and Sukriti Gupta
(Reuters) -European shares surged on Friday, capping off a week filled with earnings across the continent, as signs of a potential de-escalation of trade tensions between the U.S. and China and a stable jobs report in the United States aided risk-taking.
The pan-European STOXX 600 index closed 1.7% higher, hovering near its closing level of April 2 – before global markets were roiled by U.S. President Donald Trump’s now-delayed “reciprocal” tariffs on most trading partners.
Most regional bourses registered gains, with German blue chips leading the pack with a 2.6% increase for the day.
Amongst the STOXX sub-sectors, technology soared 3.4%, while industrials added 3%.
Global stocks initially rose after China’s Commerce Ministry said that Beijing was “evaluating” an offer from Washington to hold talks over U.S. President Donald Trump’s 145% tariffs and that Beijing’s door was open for discussions.
Equities received a further boost after data showed U.S. job growth slowed marginally in April and the unemployment rate held steady at 4.2%, assuaging fears that the world’s biggest economy was close to recession after first quarter GDP data had shown a sharp contraction.
“The employment figure gives the administration more breathing room in its trade negotiations, as risk assets are likely to respond favourably,” said Kevin O’Neil, associate portfolio manager at Brandywine Global.
Back in Europe, fresh data showed euro zone prices rose more than expected last month and underlying price pressures accelerated, though that was not expected to deter the European Central Bank (ECB) from cutting interest rates.
“The market has been taking a dovish view for the ECB following recent events… so, while a further cut in June seems all but given, the chances of a 50 bps cut seem low for now, and the path for rates further out might be less clear than the market thinks,” HSBC economists said.
EARNINGS RAGE ON
Dutch lender ING advanced 7.4% after posting stronger-than-expected first-quarter profit and announcing a 2 billion euro share buyback. Danske Bank gained 6% after Denmark’s biggest lender reported forecast-beating first-quarter profits.
Shell rose 2.1% after the oil major reported a 28% drop in first-quarter net profit – though it beat analysts’ expectations.
Airbus added 5.3% after the planemaker topped quarterly estimates across the board and reaffirmed its annual outlook.
Topping gains on the STOXX 600 was Cofinimmo, jumping 10.4% after peer Aedifica launched a takeover offer with a “significant premium” on the Belgian real estate investment trust. Shares of Aedifica fell 2.9%.
(Reporting by Sukriti Gupta and Shashwat Chauhan in Bengaluru; Editing by Mrigank Dhaniwala and Alex Richardson)
