European Shares Surge Amid Tariff Reversal and Sanction Threats
European shares saw notable gains driven by defense stocks and the reversal of tariffs by the U.S. President on the EU. The STOXX 600 index rose 0.5% amid relief over delayed tariffs, while investor sentiment remained cautious due to unpredictable trade policies and fiscal challenges.
European shares extended their rally on Tuesday, with defense stocks leading the upswing following U.S. President Donald Trump's threat of new sanctions on Russia. The continent-wide STOXX 600 index climbed by 0.5% at 0835 GMT, continuing the positive momentum after Trump postponed the EU tariff deadline.
The initial tariff announcement by Trump had incited widespread selling in global markets, yet recent trends suggest that investors are skeptical about Trump's seriousness. "The performance over the last three days implies that markets no longer take Trump's tariff threats at face value," said Daniela Hathorn, a senior market analyst at Capital.com.
Despite market recovery, uncertainty over U.S. trade policy still looms, impacting investor confidence and causing a shift from U.S. assets. The defense sector saw a 1.4% increase, reflecting a safe haven amid rising Russia-Ukraine tensions. Concurrently, financial and industrial stocks also buoyed the main index, hinting at cautious optimism.
(With inputs from agencies.)
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