European stocks climb on hopes of easing US-China trade tensions
European shares ticked higher on Friday, as investors bet on de-escalation in the trade war ahead of discussions between the U.S. and China over the weekend.
The pan-European STOXX 600 index rose 0.3%, as of 0708 GMT, with all regional bourses trading higher, led by a 0.7% gain in Germany's benchmark DAX index.
Energy and basic resources clocked in the most gains among European sectors, rising 1.8% and 1%, respectively.
U.S. President Donald Trump on Thursday predicted import tariffs on Beijing of 145% would likely come down as officials from the world's top two economies gear up for negotiations in Switzerland.
Washington will roll out dozens of trade deals over the next month, but a 10% tariff imposed on most countries will likely stay, U.S. Commerce Secretary Howard Lutnick told CNBC on Thursday, as the U.S. announced a limited bilateral trade agreement with the UK.
"The reason that global equities are kicking on is just the hope that this US-China update on the weekend in Switzerland, is going to be 'something'," said Benjamin Ford, strategist at Macro Hive.
The STOXX 600 index is heading for its fourth straight weekly gain, climbing about 13.7% from its early April trough on hopes that the U.S. will strike deals to avert a damaging trade war. European assets have also benefited from investment flows away from the United States.
Corporate results on Friday were also largely upbeat.
Commerzbank shares shrugged off early weakness to rise 2.5% after the German lender posted a surprise profit growth in the first-quarter.
Sonova climbed 5.8% after the Swiss hearing aids maker forecast higher sales and profitability for its 2025/26 fiscal year.
Shares in Bavarian Nordic jumped 12% to their highest since February-end after the Danish biotech firm's first quarter revenue beat market expectations.
Of the 149 companies in the STOXX 600 that had reported first-quarter results until Tuesday, 58.4% exceeded analyst estimates for earnings, well above the beat rate of 54% in a typical quarter, according to Refinitiv IBES data.
A busy of central bank meeting concludes with the U.S. Federal Reserve holding rates and the Bank of England delivering a quarter point rate cut this week in the backdrop of a global trade war that threatens to slow growth and stoke inflation.
BoE Governor Andrew Bailey told the BBC on Friday that Britain needs to rebuild its trading relationship with the European Union.
Britain and the EU are holding a summit on May 19 that could lead to closer defence cooperation and pave the way for agreements to ease trading.
(Reporting by Medha Singh in Bengaluru; Editing by Rashmi Aich)
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