[BENGALURU] European shares ended higher on Thursday (May 8) after US President Donald Trump announced a trade deal with Britain to lower tariffs, the first such agreement since Trump sparked a global trade war with his universal levies.
The pan-European Stoxx 600 index closed 0.4 per cent higher, with most regional indexes also concluding the day in green.
Under the deal, the UK agreed to lower its tariffs to 1.8 per cent from 5.1 per cent and provide greater access to US goods, while a 10 per cent tariff on UK goods imported into the US was kept in place.
“The deal is good. It shows that we are going towards the right direction, but we are not out of the woods yet and we are still in this high volatility, high uncertainty environment,” said Anthi Tsouvali, multi-asset strategist at UBS.
“We need to see more of those deals come in, and most importantly, with the bigger trading partners such as Europe or China. The more we wait, the more that is damaging to the global economy.”
All eyes were on the planned talks between the US and China on Saturday, as the world’s top two economies are set to take their first step to ease ravaging trade tensions.
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The UK’s benchmark index fell 0.3 per cent following an expected decision by the Bank of England to lower its benchmark rate to 4.25 per cent, as the central bank called for “a gradual and careful approach to further rate cuts” amid existing global uncertainty.
Meanwhile, central banks in Sweden and Norway stood pat on interest rates on Thursday but left the door open for future rate cuts. This came on the heels of the US Federal Reserve’s overnight decision to keep rates steady.
On the day, the region-wide defence index led the sector gains by rising about 3 per cent. Leading ammunition maker Rheinmetall jumped 4.1 per cent after reaffirming it could exceed its 2025 guidance, citing higher demand from Germany, Ukraine and other European nations.
Other defence stocks such as Renk rose 4.1 per cent, Thyssenkrupp ticked up 1 per cent and Hensoldt’s advanced 7.6 per cent.
In contrast, the utilities and healthcare stocks fell 2 per cent and 1.5 per cent, respectively, to limited overall gains.
Among individual stocks, Securitas fell 6.4 per cent after the Swedish security firm reported a smaller-than-expected rise in its first-quarter core profit.
Beer brewer Anheuser-Busch InBev added 3.2 per cent after the company reported a nearly 8 per cent rise in first-quarter operating profit, beating analysts’ estimate by more than double.
Siemens Energy gained 3.3 per cent after the power equipment maker’s second-quarter net profit significantly exceeded expectations.
Shares of Holmen jumped 7.1 per cent after the Swedish paper products maker’s operating profit beat expectations. REUTERS
