After staying subdued for much of the session till early afternoon despite positive eurozone GDP data, European stocks recovered to close higher on Wednesday after U.S. President Donald Trump decided to delay imposing auto tariffs.
Weak Chinese economic data and profit taking contributed to early weakness in the markets.
It was a fairly strong comeback for stocks later on in the session as automobile stocks rose sharply after news broke out that Trump is planning to delay imposing tariffs on car imports from EU for about six months.
The pan European Stoxx 600 ended up 0.46%. Among the major indices in Europe, Germany’s DAX closed 0.9% up, the U.K.’s FTSE added 0.76% and France’s CAC 40 advanced by 0.62%, while Switzerland’s SMI ended stronger by 0.82%.
Other markets in Europe ended mixed. Czech Republic, Finland, Ireland, Netherlands, Norway, Poland, Portugal, Spain and Sweden ended higher, while Austria, Belgium, Denmark, Greece, Iceland, Italy, Russia and Turkey closed weak, albeit off the day’s lows.
Automobile stocks BMW, Daimler, Peugeot and Porsche ended sharply higher. Volkswagen ended flat.
Compass, DCC, Micro Focus, Coca-Cola, Tui, Intercontinental, Barclays, HSBC and Hargreaves Lansdown were among the prominent gainers in the UK market.
On the other hand, Provident Financial, Kingfisher, SSE, Capita, Dixons Carphone and Mediclinic International ended notably lower.
RWE, Infineon, Covestro, Bayer, Continental and HeidelbergCement were the notable gainers in the German market.
Thyssenkrupp shares tumbled nearly 5% on reports metalworkers’ union IG Metall demanded a fresh concept from the company’s management.
Shares of French lender Credit Agricole lost about 2.6% after the company reported an 11% drop in first-quarter earnings.
On the economic front, Eurozone’s quarterly economic growth rate doubled in the first three months of the year, latest figures from Eurostat showed.
Gross domestic product grew 0.4% from the fourth quarter of 2018, when the euro area economy expanded 0.2%.
The pace of growth was the strongest since the second quarter of 2018, when the economy expanded at the same rate.
According to preliminary data from Destatis, Germany’s economy expanded for the first time in three quarters, advancing 0.4% sequentially in the first quarter, after staying flat in the fourth quarter and contracting 0.2% in the third quarter of 2018.
On a yearly basis, GDP climbed working-day adjusted 0.7%, which was slightly faster than the 0.6% expansion seen in the fourth quarter and in line with expectations.
However, on an unadjusted basis, economic growth eased to 0.6% from 0.9% a quarter ago. Destatis is set to publish more detailed GDP report on May 23.
On the Brexit front, the U.K. government announced that Prime Minister Theresa May will bring her Brexit deal back to Parliament in the week of June 3.