By Sruthi Shankar
(Reuters) -European stocks edged higher on Tuesday, with utilities and telecom firms leading gains as investors awaited updates on U.S. tariff policy that has raised concerns about health of the global economy.
The pan-European STOXX 600 index rose 0.4% by 0851 GMT, hovering at a seven-week high.
The German DAX, up 0.2%, touched a record high, while Spain’s IBEX was trading at its highest since 2008.
Utilities rose 1.5%, with Portugal’s EDP Renovaveis climbing 3.5% after Deutsche Bank upgraded the stock to “buy” from “hold.”
Shares of offshore wind power developers Oersted jumped 13.3% and Vestas Wind gained 4% after U.S. President Donald Trump’s administration lifted a month-old stop-work order on a major offshore wind facility planned off the coast of New York.
Broader markets also stabilised after a surprise downgrade by Moody’s on U.S. sovereign credit late on Friday sapped risk appetite. Investors are also awaiting any trade deals, with Trump’s reciprocal tariffs set to kick in again in early July.
“We still think that the path of least resistance would be higher for risky assets in the near term,” Mohit Kumar, economist at Jefferies, noted.
“That’s not because we are constructive on the macro picture, but because we believe that investors are still underinvested and there’s cash sitting on the sidelines.”
Most major stock markets have recovered from the early April slump when Trump announced global tariffs, with signs of more U.S. trade negotiations and better-than-expected economic data aiding sentiment.
China cut benchmark lending rates for the first time since October on Tuesday, to help buffer the economy from the impact of the Sino-U.S. trade war.
Among other stocks, Swiss bank UBS dropped 2%, with traders citing a media report that the lender was set to lose the first leg of a battle over government proposals to make it hold more capital.
Salmar dropped 6% after the Norwegian salmon farmer reported lower-than-expected first-quarter operating profit.
In the UK, fast food chain Greggs, Upper Crust owner SSP Group and technical products and service distributor Diploma climbed between 3.4% and 17.1% after reporting results.
Diploma shares hit a record high after it raised its full-year organic revenue growth forecast.
Heineken dipped 0.5% after Bloomberg News reported Mexico’s Femsa had sold its remaining stake in the brewer.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Varun H K and Tasim Zahid)
