European stocks closed higher Wednesday as investor sentiment over the prospect of an initial U.S.-China trade deal improved.
The pan-European Stoxx 600 closed provisionally up over 1%, with all sectors and major bourses in positive territory.
Market focus was largely attuned global trade developments. Bloomberg reported Wednesday, citing unnamed sources familiar with the talks, that the U.S. and China were moving closer to securing an agreement on the amount of tariffs that would be rolled back in a so-called "phase one" trade deal.
Europe's basic resources shares led the gains following the report, with the sector climbing 1.7%.
Looking at individual stocks, France's Ubisoft Entertainment rose to the top of the European benchmark after Morgan Stanley raised its stock recommendation to "overweight" from "equal weight" on Wednesday. Shares of the French game publisher rose 6%.
Sticking with France, Orange tumbled to the bottom of the index. The telecoms operator announced Wednesday that it plans to follow in the footsteps of rival companies by carving out its mobile towers in most European countries where it is present. Shares of Orange dipped over 4%.
On the data front, euro zone business activity held steady in November, official data released on Wednesday showed. A final reading of IHS Markit's final euro zone composite Purchasing Managers' Index (PMI) came in at 50.6, marginally above the 50 mark separating growth from contraction.
On Wall Street, shares rose amid the positive mood music around trade. The Dow Jones Industrial Average was up about 200 points, while the S&P 500 and Nasdaq indexes were also positive.
President Donald Trump on Tuesday said a limited trade agreement with China might have to wait until after the 2020 presidential election.
Speaking to reporters in London, Trump said he had "no deadline" for striking a deal with Beijing. It had previously been expected both countries could sign a "phase one" trade deal before the end of 2019. But market sentiment improved Wednesday on the back of Bloomberg's report.
Earlier in the week, Trump threatened to slap duties against French goods and imposed tariffs on Argentina and Brazil imports. It appears to have dampened market sentiment at a time when many had hoped the U.S. and China might be able to de-escalate an ongoing trade war.
In the U.K., several world leaders have gathered in London to mark the 70th anniversary of NATO. The U.S. president abruptly canceled a scheduled press conference at the event, which has been marred by disagreement and drama.
Trudeau reportedly said he had a "great meeting" with Trump and attributed some of his surprise to the president's "unscheduled announcement" that next year's G-7 summit would be held at Camp David in Maryland.