Markets

European stocks close higher as White House says China wants to make trade deal

Key Points
  • European stocks closed higher Wednesday after President Donald Trump said China wanted to make a trade deal with the United States.
  • President Trump said on Wednesday that a Chinese delegation would travel to the U.S. after indicating that China wanted to make a trade deal.
  • Sterling slumped to around $1.30 on Wednesday amid reports that talks to break the Brexit deadlock may soon collapse.

European stocks closed higher Wednesday after President Donald Trump said China would visit the U.S. to make a trade deal.

The pan-European STOXX 600 index was 0.22% higher at the closing bell, paring losses seen earlier in the session. All major bourses were in positive territory.

President Trump said in a tweet on Wednesday that a Chinese delegation would travel to the U.S. after indicating that China wanted to make a deal that would end the ongoing trade tensions between the two nations, which have rocked markets for several months. The information in Trump's tweet was later confirmed by White House Press Secretary Sarah Sanders.

Stocks on Wall Street also edged higher on the back of the news.

Looking at individual stocks, cigarette maker Imperial Brands slumped toward the bottom of the European benchmark after it reported weaker-than-expected sales of its e-cigarettes on Wednesday, sending its shares to their lowest level this year. The British company's shares were down more than 6%.

British broadcaster ITV also saw its shares in negative territory on Wednesday, losing 6% after the company reported lower revenues ahead of the launch of its streaming service.

Meanwhile, Siemens surged toward the top of the index after the German company posted better-than-expected operating profit on Wednesday. Shares gained around 4.5% after the company's results showed profit rose 7% to 2.4 billion euros ($2.69 billion) in the three months to March 31, beating estimates of 2.24 billion euros in an Infront data poll.

German payments company Wirecard also ended the session higher, with shares gaining almost 5% after the firm announced it was considering buying back shares with some of the proceeds of a 900 million euro ($1 billion) convertible bond that Japan's Softbank Group Corp will buy, Reuters reported.

Political instability

Back in Europe, political uncertainty continued as the U.K. Conservative government resumed its negotiations with the main opposition Labour Party in bid to break parliamentary deadlock over the U.K.'s departure from the European Union. Sterling slumped to around $1.30 on Wednesday amid reports that talks to break the deadlock may soon collapse.

France suggested international sanctions could be reimposed on Iran if it reneges on commitments under its nuclear deal, Reuters reported, after Tehran said it would scale back its compliance a year after Washington pulled out.

Meanwhile, Italy accused the EU of prejudice after grim economic forecasts suggested the Italian economy would grow 0.1% this year, lagging the rest of the bloc.