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European shares hit two-week high on trade talk hopes; miners, autos up

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European shares hit two-week high on trade talk hopes; miners, autos up
FILE PHOTO: The German share price index DAX board is pictured at Frankfurt's stock exchange in Frankfurt, Germany January 7, 2016. REUTERS/Kai Pfaffenbach   -   Copyright  Kai Pfaffenbach(Reuters)
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MILAN (Reuters) – European shares hit two-week highs on Wednesday, led higher by materials stocks, while disappointing updates from staffing firm Adecco <ADEN.S> and home improvement retailer Kingfisher <KGF.L> weighed.

The pan-European STOXX 600 <.STOXX> rose 0.3 percent by 0713 GMT with sentiment supported by hopes that the U.S. and China will return to the negotiating table after the latest tariff round.

“Our base-case scenario sees both parties negotiating a settlement in the next 6–9 months,” Credit Suisse strategists said in their daily note.

Basic materials <.SXPP> were the biggest sectoral gainer, up 1.6 percent, after copper prices rose sharply as investors shrugged off the risks of an escalation of the U.S.-China trade row.

Adecco fell 4 percent, after the world’s largest staffing company said it has seen a slowdown in growth so far in the third quarter, while Kingfisher reported a 15 percent fall in half-year profits, sending its shares down 5 percent.

A solid update however lifted German automotive parts maker Schaeffler <SHA_p.DE> to the top of the STOXX, up 5.3 percent. The trade-sensitive autos sector <.SXAP> was also a strong gainer, up 1 percent.

Danske Bank <DABA.CO> fell 4.4 percent following the resignation of its CEO and an updated on a money laundering probe that prompted the bank to cut its full-year outlook.

(Reporting by Danilo Masoni, Editing by Helen Reid)

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