Markets

European markets close higher as auto stocks jump 3.4%; investors monitor U.S.-China tariff deadline

Key Points
  • The pan-European Stoxx 600 closed up 0.4 percent on Thursday.
  • Autos stocks led the gains, closing up 3.4 percent amid news German carmakers were now prepared to support an elimination of EU tariffs on cars imported from the U.S.
  • French catering firm Sodexo topped the Stoxx 600, closing up 8.7 percent after releasing its third-quarter results.

European stocks closed higher Thursday afternoon as hopes over a softening in U.S. trade rhetoric boosted auto-related stocks.

The pan-European Stoxx 600 closed up 0.4 percent, although it had traded higher earlier in the day. All major bourses were in positive territory with German's XETRA DAX leading the way, finishing trade up 1.2 percent.

Autos stocks led the gains, closing up 3.4 percent amid news that German carmakers were now prepared to support an elimination of EU tariffs on cars imported from the U.S. The U.S. ambassador to Germany reportedly told German car executives that President Donald Trump would suspend threats of charges on autos imported from the EU if the bloc also annulled tariffs on U.S. cars.

The news comes after the U.S. president had said last month that he wanted to impose a 20 percent import tariff on all EU-assembled vehicles. Shares of Daimler, BMW and Volkswagen — whose bosses were all reported to have met with Ambassador Richard Grenell on Wednesday — all closed around 4 percent higher on Thursday afternoon.

Meanwhile, basic resources, chemicals and technology were all sectors up over 1 percent by the end of the day's trading.

Looking at individual stocks, France's Sodexo reported slower-than-expected sales growth in the third-quarter, amid ongoing weakness in its North American business. Nonetheless, the food services and facilities management group achieved its recently reduced full-year targets for sales growth and margins. Its shares closed 8.7 percent higher.

Meanwhile, SBM Offshore slumped to the bottom of the European benchmark Thursday after a Brazilian court ordered Petrobras to provisionally withhold some of its payments to the Dutch marine engineering firm. The court issued its request to ensure SBM Offshore paid whatever penalties it might receive from a separate corruption case. Shares of the Amsterdam-listed stock were trading 7.2 percent lower by the end of the day.

U.S. stocks higher

Stateside, stocks traded higher Thursday as tech shares rose, but gains were capped as the U.S. prepared to slap tariffs on goods imported from China. The Dow Jones Industrial Average rose 39 points, with Intel outperforming. The gained 0.2 percent as tech climbed 0.5 percent. The also advanced 0.2 percent.

Market focus is largely fixed to the ongoing U.S.-China trade row, with investors fearful the dispute could soon derail global growth. Washington has said it is prepared to implement tariffs on $34 billion of Chinese imports on July 6, with Beijing then expected to respond with charges of its own on U.S. made goods.