LONDON, Aug 30 — European stocks continued to trade near one-month highs today, helped by a surge in German real estate companies and on relief that trade tensions between the United States and China were easing.
The two sides gave signs yesterday they discussed the next round of in-person negotiations in September ahead of a looming deadline for additional US tariffs.
That eased trade tensions and helped stock markets rally one per cent in the previous session and helped the pan-European STOXX 600 index rise 0.68 per cent to hit its highest level since August 2 by 0810 GMT today.
“The most important thing for markets right now is that China hasn’t escalated the trade war by retaliating against the latest US tariffs,” said Teeuwe Mevissen, Senior Market Economist at Rabobank.
“Markets are now awaiting the talks and since the chances of seeing escalation in trade has greatly diminished, there will be some relief for the coming period.”
Tariff-sensitive automakers rose 2.12 per cent and technology stocks gained 0.85 per cent.
The easing of trade tensions and a resolution of the political crisis in Italy have helped put Europe’s main index on pace to post its best weekly performance since June 7 and recoup nearly half of this month’s losses.
The STOXX 600 is now set to end August 1.8 per cent lower.
The real estate sector sector jumped two per cent and was set to post its best day since April, as German real estate companies gained after a newspaper reported a rent freeze in Berlin could be watered down after a meeting of local governing parties.
Shares of Deutsche Wohnen rallied 9.4 per cent to the top of the STOXX 600, while Vonovia SE gained 4.7 per cent and LEG Immobilien AG rose 3.6 per cent.
Italy’s FTSE MIB was set to post its third straight session of gains, up 0.64 per cent, as the country appears to be moving closer to ending a three-week political crisis with the collapse of one government and the arrival of another.
Danish drug company Novo Nordisk slipped one per cent and weighed on the benchmark index after Jefferies downgraded the company’s shares to “underperform” from “hold”. — Reuters
