European markets open higher as phase I trade deal boosts sentiment

European markets opened higher Monday after the U.S. and China agreed a ‘phase one’ trade deal, though investors are likely to remain cautious with some details remaining unclear.

The pan-European Stoxx 600 climbed 0.5 percent in early trade, basic resources leading the way with 1% gains as all sectors and major bourses entered positive territory.

Washington and Beijing announced on Friday that an agreement had been reached pending legal procedures, a significant step forward after a bruising 18-month trade war.

However, questions have been raised by market participants over some details of the deal which remain hazy, notably the scale of agricultural purchases and the prospect of China balancing bilateral trade flows.

U.S. Treasury Secretary Steven Mnuchin told CNBC on Saturday that the deal would be signed in early January and that phase two may then be negotiated in stages.

Asian stocks were mixed Monday with mainland Chinese stocks jumping on the back of better-than-expected industrial output data, while indexes in Japan and Hong Kong edged downwards.

Back in Europe, British Prime Minister Boris Johnson will welcome 109 new Conservative lawmakers to parliament on Monday, promising to move forward swiftly with Brexit and to increase funding to the National Health Service (NHS).

In corporate news, Reuters reported Sunday that China’s BAIC plans to double its stake in German automaker Daimler in a bid to win a board seat and challenge rival Geely.

Source: CNBC