European stocks open higher as trade war offers reprieve
European stocks opened higher Tuesday after tensions eased slightly in the escalating trade war between the U.S. and China.
The pan-European STOXX 600 rose 0.3% immediately after the bell, auto stocks leading gains with a 1.1% rise while utilities was the only sector to enter the red in the opening minutes of trading.
Monday saw markets close lower after a U.S. crackdown on Chinese telecommunications giant Huawei weighed on the technology sector. Major European chipmakers saw a sell-off after reports that Germany’s Infineon had suspended shipments to Huawei.
However, markets are expected to rebound slightly today after the U.S. government temporarily eased some trade restrictions imposed on the company, in a move intended to minimize disruption for Huawei customers around the world, Reuters reported Monday.
In Asia, stocks were mostly higher in Tuesday afternoon trade, the Shenzhen component showing the strongest gains at 2.14%, as investors digested news of the temporary reprieve.
Stateside, investors will also be monitoring escalating geopolitical tensions between the White House and Iran after President Donald Trump warned Monday that Iran would be met with “great force” if it attacked U.S. interests in the Middle East. Reuters reported that Washington strongly suspects Shi’ite militias with Tehran ties of firing a rocket into Baghdad’s Green Zone.
Back in Europe, British Chancellor of the Exchequer Philip Hammond will warn Tuesday that those on the “populist right” pushing for the U.K. to leave the European Union without a deal would be doing deliberate damage to the British economy.
In Ukraine, new President Volodymyr Zelenskiy took the oath of office Monday and immediately dismissed a Parliament still dominated by loyalists to his predecessor, announcing a snap election in two months’ time. Meanwhile in Austria, Chancellor Sebastian Kurz is expected to call an early election in September after Vice Chancellor Heinz-Christian Strache, leader of the nationalist Freedom Party, resigned following a video sting operation exposing corruption.
In corporate news, the OECD economic outlook will be released as part of the organisation’s forum in Paris, while a host of British companies including Nationwide Building Society, Severn Trent, Halfords, and WH Smith will report earnings.
Oil giant BP will hold its annual general meeting (AGM) in Scotland, while protests from Greenpeace activists continue outside its London headquarters.