INSUBCONTINENT EXCLUSIVE:
LONDON: European shares made a modest bounce on Tuesday, recovering slightly after trade tensions sent stock markets into a spiral as
investors shed risky assets.
The pan-European STOXX 600 was up 0.3 per cent by 0837 GMT, but was far from making up all the previous
session's 2 per cent losses
The index hovered near its lowest level since mid-April.
Germany's exporter-heavy DAX, which has been the most sensitive to trade
tensions, managed a 0.4 per cent gain.
The sectors worst hit by the trade-related sell-off were Tuesday's strongest gainers, with basic
resources, banks and oil stocks leading the way, while tech stocks also recovered.
Autos, a sector in the firing line of higher tariffs,
managed a 0.5 per cent gain having hit a fresh 9 1/2 month low on Monday, with Fiat Chrysler leading Italy's FTSE MIB.
Multinational
consumer firms LVMH, Kering, Richemont and Swatch all rose too.
Concerns over trade have gripped global markets over the past weeks, wiping
$1.5 trillion off the MSCI All-Country World since June 12.
Trade disputes and slower economic growth have hit European stocks hard, with
the STOXX 600 down 3 per cent year-to-date and euro zone stocks down 2.4 per cent.
Chris Hiorns, senior fund manager at EdenTree, said he
thought European stocks would perform more robustly "if we could really see growth come through and become self-enforcing, a virtuous circle
of growth driving higher demand."
But, he added: "If we are looking for triggers then what we'd want is for Trump to stop his trade war with
China."
On the stock level, merger and acquisition news drove the biggest movers.
British satellite firm Inmarsat fell 6.3 per cent, the
worst on the STOXX 600, after France's Eutelsat said it did not intend to make an offer for the firm, having said on Monday it was
considering a possible bid.
Eutelsat shares rose 2.9 per cent.
Bid speculation meanwhile boosted French payments processor Ingenico 4.2 per
cent after Bloomberg reported on Monday that the firm was drawing preliminary interest from several private equity firms.
In results-driven
moves, the food and biopharma testing firm Eurofins jumped 5.4 per cent after saying it was raising its revenue target for the year, having
received antitrust clearance for its acquisition of US food company Covance.
Austrian paper pulp maker Andritz rose 3.1 per cent after
Goldman Sachs upgraded the stock to a "buy", a day after the firm clinched a deal to buy US company Xerium Technologies.
Ambu shares fell
back 5.2 per cent, having risen as much as 9 per cent on Monday after an "overweight" rating from JP Morgan.
While investors were concerned
about the potential deepening of a trade spat which has shifted from a bilateral US-China dispute to one involving more regions, including
Europe, some analysts said the economic impact would ultimately be limited.
"Trade negotiations have also been distracting attention from
decent economic fundamentals, especially in the US, and strong corporate earnings growth," said Mark Haefele, global chief investment
officer for UBS Wealth Management.
