European stocks rebound to close higher after global trade concerns ease; GSK up almost 5%

  • Hopes have risen that the US and China will move to avoid a trade war.
  • The White House is seeking reduced tariffs on imported cars as well as asking China to allow foreign majority ownership of financial services firms.
  • GlaxoSmithKline is buying Novartis out of their consumer health care partnership.

European equities jumped higher Tuesday as concerns over a global trade war eased.

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The pan-European Stoxx 600 closed provisionally higher by 1.16 percent with every sector moving into positive territory. Technology stocks were the top performers, up around 2 percent.

Overall the main driver of market sentiment was news that the U.S. and China are open to discuss trade-related issues. The news comes after a ratcheting up of tensions between the superpowers and fears of a potential trade war. The White House is seeking reduced tariffs on imported cars as well as asking China to allow foreign-majority ownership of financial services firms in exchange for not imposing higher prices on an array of imported Chinese goods.

Investors are also keeping their eye on politics after several European countries decided to expel many Russian diplomats after an alleged nerve attack in U.K. soil on a former Russian spy. The U.S. also ordered on Monday the expulsion of 60 diplomats and Australia another two, adding that it could also boycott the soccer World Cup this summer in Russia.

GlaxoSmithKline ended the day at the top of the Euro Stoxx 600, finishing 4.8 percent higher. GlaxoSmithKline is buying Novartis out of its consumer health care partnership for $13 billion, taking over products including Sensodyne toothpaste, Panadol headache tablets, and Nicotinell patches. Analysts believe that the merger will increase shareholder payouts.

French food retailer Casino Guichard rose more than 4 percent. The firm is joining forces with Amazon to take its groceries to Amazon Prime Now customers. The service will start this year in Paris.

Heating and plumbing products firm Ferguson also moved up by 6.7 percent to top the FTSE 100 after reporting its half-year results. The firm posted an ongoing revenue of 10.3 percent ahead of last year, Reuters reported.

At the other end of the index stood H&M. The Swedish retailer announced a lower net profit in the first quarter, sending shares down by 5.04 percent for the day.

U.S. stocks continued to trade higher Tuesday, adding to the strong gains seen in the previous session, as concerns over a trade war dampened.

Finally, Deutsche Bank is reportedly looking to replace John Cryan as chief executive. The bank's share price rose 1.14 percent over the course of the day.