Markets

European stocks close higher after signing of partial US-China deal

Key Points
  • The pan-European Stoxx 600 index closed provisionally up by 0.2%.
  • Market players digested the signing of the U.S. and China's "phase one" trade deal.

European stocks closed higher Thursday as investors reacted to the signing of a partial trade deal between the U.S. and China.

The pan-European Stoxx 600 index closed provisionally up by 0.2%. Utilities shares were the biggest gainers, climbing 0.9%, while autos stocks slipped 0.9%.

President Donald Trump signed an initial "phase one" trade deal with China on Wednesday that will roll back some of the tariffs on one another's goods and increase Chinese purchases of U.S. products.

While the deal takes some steps to address unpalatable trade practices by Beijing, many of the key structural issues at the heart of the trade conflict remain unresolved as the two sides enter "phase two."

On Wall Street, equities jumped on the trade news. The Dow Jones Industrial Average climbed 160 points, while the S&P 500 and Nasdaq indexes were also higher.

Back in Europe, trade tensions also flared between China and the Netherlands after Beijing's ambassador was quoted warning the Dutch government against preventing Dutch semiconductor equipment supplier ASML from shipping its newest products to China.

In corporate news, Atlantia is hoping to reopen talks with Italy's coalition government on motorway toll cuts following a long-running dispute over its concessions, Reuters reported citing two sources.

Meanwhile Airbus Chief Commercial Officer Christian Scherer told Reuters on Wednesday that the world's largest planemaker sees enough demand for its wide-bodied A330neo passenger jet to retain stable production levels.

Stocks on the move

Looking at individual stocks, Tullow Oil stock jumped 11%, recovering from a sharp decline on Wednesday after the British oil company announced a $1.5 billion writedown on its outlook for oil prices.

John Wood Group shares surged nearly 8% after a strong trading update, while Hellofresh shares jumped almost 2% after the German meal-kit delivery company projected that it would beat its sales and profits guidance for 2019.

At the other end of the European benchmark, Pearson shares slumped almost 9%. The fall came after the British education company's trading update showed profits coming in at the bottom end of its guidance.