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.