European shares jump as Germany loosens debt brake
European shares bounced back on Wednesday after their worst day in more than six months as German leaders agreed to loosen the country's so-called debt brake.
Germany's blue-chip index jumped 2.6% as of 0811 GMT to trade near a record high.
The pan-European STOXX 600 index was up 1.1%. The benchmark index logged its worst day since August 2024 on Tuesday as U.S. President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect.
The parties hoping to form Germany's next government agreed to create a 500 billion euro ($534 billion) infrastructure fund and loosen fiscal rules to boost defence spending and revitalise growth.
Germany's 10-year benchmark yield jumped 20 basis points to 2.680%.
The country's construction firms and arms makers jumped. Cement maker Heidelberg Materials rose 7.8%, industrial services provider Bilfinger jumped 11.7% and construction group Hochtief advanced 7.6%.
Defence stocks Rheinmetall and Renk were up between 1.3% and 5.5%, respectively.
The index of European banks led the sectoral gains, rising about 4%.
In other stocks, Adidas fell 3.3% after the sport retailer forecast sales growth slowing slightly to up to 10% in 2025.
($1 = 0.9360 euros)
(Reporting by Nikhil Sharma; Editing by Mrigank Dhaniwala)
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