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European shares bounce off six week lows on trade deal hopes

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European shares bounce off six week lows on trade deal hopes
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 9, 2019. REUTERS/Staff   -   Copyright  STAFF(Reuters)
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(Reuters) – European shares strengthened on Friday, recovering from six weeks lows, as investors hoped that United States and China would still be able to resolve their trade dispute, even as a planned U.S. tariff hike on Chinese imports took effect.

The STOXX 600 index added 0.8 percent by 0717 GMT. The regional index, which has been hit by trade worries most of this week, remains on track for its biggest weekly decline this year.

Trade-sensitive Germany’s DAX was leading the charge with its 1 percent rise.

The increased tariffs on $200 billion worth of Chinese goods comes in the middle of two days of talks between top U.S. and Chinese negotiators to try to rescue a faltering deal aimed at ending a months-long trade war between the world’s largest economies.

Trade optimism helped technology and auto stocks lead the rally among European sub-sectors.

Defensive stocks – real estate, utilities and telecom – posted the smallest gains.

A handful of strong earnings also helped the sentiment.

Air France shares rose after the carrier reported a 9.2 percent in passengers across the group last month while British Airways owner IAG jumped after reiterating its operating profit guidance in 2019.

Altice Europe rose 3 percent after its founder Patrick Drahi said lower costs, a rise in profit and growth in new customers in key market France signalled the turnaround of his telecoms and cable group.

Denmark-based medical equipment marketer Ambu landed at the bottom of the STOXX 600 after the company’s chief executive Lars Marcher resigned.

(Reporting by Medha Singh and Agamoni Ghosh in Bengaluru; Editing by Keith Weir)

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