European shares jumped on Wednesday following four sessions of declines after Ukraine accepted a US proposal for a 30-day ceasefire with Russia.
The pan-European STOXX 600 was up 0.9 per cent early on Wednesday.
London’s FTSE 100 was up 0.4 per cent and Germany’s DAX was up 1.4 per cent.
The MSCI World Equity index, which has lost around 4.1 per cent so far this month, was a touch higher, up 0.1 per cent on the day.
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US says ‘ball in Russia’s court’ after Ukraine agrees to 30-day ceasefire
“There is some optimism as news is hitting the wires. In the end, more important than just the ceasefire is also the news that the US resumes its support for Ukraine,” said Bas van Geffen, quantitative analyst at Rabobank.
The US agreed on Tuesday to resume military aid and intelligence sharing with Kyiv following Ukraine’s willingness to accept the proposal.
A majority of subindexes on the STOXX 600 clocked gains in early trading, led by a 1.7 per cent jump in the index of European banks.
Zealand Pharma jumped 24 per cent after Swiss pharmaceutical company Roche acquired rights to an obesity therapy by the biotech firm in a collaboration deal worth up to $5.3 billion (€4.8 billion). Shares of index heavyweight Roche were up 4.1 per cent at a more than two-year high.
Europe’s retail-focused index was an outlier and fell 2.8 per cent, hit by a 7 per cent fall in Inditex after the Zara owner reported a slower start to its first quarter, beginning February 1st.
Puma tumbled 22.2 per cent to a more than eight-year low as the German sportswear group gave a disappointing outlook for first-quarter sales.
Porsche fell 3.7 per cent after the luxury carmaker said its extensive restructuring, as well as trade tensions and intensifying competition in China, will weigh on 2025 earnings.
The benchmark index lost 1.7 per cent in the previous session after US president Donald Trump doubled tariffs on Canadian steel and aluminium products, a move which he soon backtracked.
His unpredictable trade policies have taken a hit on global markets, with the S&P 500 wiping out an eye-watering $4 trillion in market value from its recent peak hit last month.
“Trump’s direction is more or less clear, but the details seem to change day after day. As a result, it’s very difficult to see exactly what is and what isn’t priced currently in markets,” Rabobank’s van Geffen added.
Trump’s increased tariffs on all US steel and aluminium imports took effect on Wednesday, drawing swift retaliation from Europe that vowed to impose counter tariffs on €26 billion worth of US goods from next month.
Financial markets were left scrambling on Wall Street on Tuesday but indexes recovered some of their losses later in the session.
Meanwhile, Hong Kong’s stock market is turning into one of the biggest winners of Donald Trump’s chaotic first 50 days in office.
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The city’s Hang Seng benchmark has surged 21 per cent since Trump assumed the presidency, making it the world’s top performer. The S&P 500 Index has slumped about 7 per cent to trail almost all global gauges. The divergence between the two indexes has become the most extreme since the dotcom bubble burst in 2000, according to a 90-day correlation measure.
Global investors are seizing on China’s dramatic advances in artificial intelligence to pour funds into the Hong Kong market at a time when Trump’s trade wars and erratic policymaking are undermining confidence in the US economy.
Asian stocks were set for declines after Wall Street was whipsawed by Mr Trump’s on-off tariff plans and comments that downplayed fears of a recession.
Australian shares fell and equity-index futures in Japan and Hong Kong pointed to losses early Wednesday. Futures contracts for the S&P 500 rose in early trading. – Reuters/Bloomberg
