By Twesha Dikshit and Ragini Mathur
(Reuters) -European shares closed higher on Monday, rebounding from six-week lows as a surge in banking stocks offset a decline in Swiss shares following a hefty 39% U.S. tariff on Swiss goods.
The pan-European STOXX 600 index rose 0.9%, with most major regional markets, barring Swiss stocks, rebounding from Friday’s sharp losses, when worries about tariffs and a weak U.S. jobs report hammered sentiment.
The German DAX climbed 1.4%, France’s CAC 40 rose 1.1% and Britain’s FTSE 100 added 0.7%.
Zurich’s SMI index dipped 0.2% as trading resumed following a long weekend. Switzerland was left stunned on Friday after Trump hit it with one of the highest tariffs in his global trade reset, with industry associations warning that tens of thousands of jobs were at risk.
Swiss luxury watchmakers’ shares, including Richemont and Swatch, fell 1.3% and 2.3%, respectively.
“It’s understandable why Switzerland is lagging. Companies most exposed to international trade flows appear to be under the greatest pressure. However, a quarter percent decline isn’t particularly significant,” said Russ Mould, investment director at AJ Bell.
“It seems there may still be hopes that a deal will be struck on terms that are, if not favourable, at least less unfavourable than what the White House has imposed so far.”
Switzerland was ready to make a “more attractive offer” in trade talks with Washington, its government said on Monday.
The duties were scheduled to go into effect on Thursday, giving Switzerland, which counts the U.S. as its top export market for pharmaceuticals, watches, machinery and chocolates, a small window to strike a better deal.
European stocks have moved further away from this year’s peak as U.S. tariffs on its key trading partners raise concerns about a resurgence in inflationary pressures and slowing economic growth.
Banks were a bright spot on the day, with shares in British lenders surging after the country’s Supreme Court overturned a ruling on motor finance commissions, easing fears among banks about a redress scheme some analysts had warned could run into the tens of billions of pounds.
Lloyds added 9% to the top of the STOXX 600, while Close Brothers surged 24%. Barclays, Bank of Ireland and Santander all gained more than 2% each.
UBS dipped 0.7% after the bank said it would pay $300 million to resolve U.S. mortgage securities cases related to the misselling of mortage-linked investments.
(Reporting by Twesha Dikshit, Medha Singh and Ragini Mathur in Bengaluru; Editing by Subhranshu Sahu, Shinjini Ganguli and Alex Richardson)
