Stock Market Rises Across Europe, Germany's DAX Reaches All-Time High Earthquaking in Positivity over Trade Deal Expectations
Friday saw European shares surge, with Germany's DAX index hitting a record high close, as hope for easing global trade conflict eased investor worries, setting the stage for U.S.-China talks over the weekend.
The pan-European STOXX 600 index ended up 0.4%, with Frankfurt's DAX index ascending 0.6% and a weekly gain of 1.7%.
BP shares surged 4.4% after a Financial Times report suggested that Shell, Chevron, Exxon Mobil, TotalEnergies, and ADNOC have toyed with the idea of acquiring the oil major.
The energy and basic resources sectors led the sector gains, with a 2% and 0.9% increase, respectively. Automobiles, potentially influenced by tariff-related news, rose 0.8%.
Prior to the U.S.-China trade talks, President Donald Trump urged China to open its market to the U.S., while remarking that 80% tariffs on Chinese goods "feels right." China currently grapples with 145% U.S. import tariffs.
Top officials from the world's two largest economies are meeting in Switzerland on Saturday to de-escalate their market-damaging trade war.
In anticipation, Washington plans to launch a series of trade deals over the coming month. A 10% tariff on most countries is likely to remain, according to U.S. Commerce Secretary Howard Lutnick,, who spoke to CNBC on Thursday. As the U.S. announced a limited bilateral trade agreement with the UK, this suggests that other countries, including the EU, might not reap significant benefits from the negotiations.
Jochen Stanzl, chief market analyst at CMC Markets, opined, "Everybody is jubilant because one thing is clearer now that Trump is not returning to the reciprocal tariffs he held up on 'Liberation Day.' "
The STOXX 600 witnessed a fourth consecutive weekly advance, resulting in modest gains of 0.2% amid a busy week that included the U.S. Federal Reserve maintaining interest rates and the Bank of England delivering a quarter-point rate cut.
Despite Trump's initial aggressive tariff announcements in April, the STOXX 600 has managed to recuperate from its significant losses. Among individual stocks, Commerzbank rose 4% after the German lender reported surprising profit growth in the first quarter. Mediobanca soared 5.4% following a quarterly profit that outperformed market expectations, while attempting to counter an unsolicited bid from smaller rival Banca Monte dei Paschi (MPS). Shares in Bavarian Nordic rose 6.1%, exceeding market predictions after the Danish biotech firm surpassed first-quarter revenue expectations.
With the U.S.-China trade talks scheduled to take place this weekend in Geneva, the outcome remains unknown, but it is expected to have significant implications for global stock markets[1][2]. Positive developments in trade negotiations can lead to increased optimism in stock markets, while negative outcomes may trigger market volatility and downturns.
- The DAX index, Germany's benchmark index, experienced a 0.6% rise and a weekly gain of 1.7%, contributing to the overall surge in European shares on Friday.
- BP shares saw a significant increase of 4.4%, following a Financial Times report suggesting that several multinational oil companies, including Exxon Mobil, may be considering an acquisition of the oil major.
- Sector-wise, the energy and basic resources sectors led the gains, with increases of 2% and 0.9% respectively, and the automobiles sector rose 0.8%, potentially influenced by tariff-related news.
- As top officials from the U.S. and China begin talks this weekend in Switzerland, there is anticipation that Washington will launch a series of trade deals in the coming month, with a 10% tariff on most countries likely to remain.
- Jochen Stanzl, a market analyst, expressed optimism about the trade negotiations, stating that there is clarity that President Trump will not revert to the reciprocal tariffs he held up on 'Liberation Day.'
- The STOXX 600, a pan-European index, witnessed a fourth consecutive weekly advance, with modest gains of 0.2%, amid a busy week that included interest rate decisions from the U.S. Federal Reserve and the Bank of England.
- Beyond individual stocks, the outcome of the U.S.-China trade talks this weekend in Geneva is expected to have significant implications for global stock markets, as positive developments can lead to increased optimism and growth, while negative outcomes may trigger market volatility and downturns.
