European stock markets finished solidly higher Thursday, recovering a portion of the losses after the prior day’s selloff that came amid heightened concerns of a global trade war.
What are markets doing?
The Stoxx Europe 600 index SXXP, +0.78% rose 0.8% to close at 384.37, after falling 1.3% on Wednesday, for its biggest one-day percentage drop since June 25.
The U.K.’s FTSE 100 index UKX, +0.78% ended 0.8% higher at 7,651.33, while France’s CAC 40 index PX1, +0.97% jumped by 1% to finish at 5,405.90, marking its largest one-day gain since June 22, according to WSJ Market Data Group.
Germany’s DAX 30 index DAX, +0.61% rose 0.6% at 12,492.97. The German benchmark was the biggest loser among the country-specific indexes on Wednesday, ending 1.5% lower, as industrial stocks were particularly hard hit by trade worries.
The euro EURUSD, +0.1199% traded at $1.1690 on Thursday, up from $1.1674 late Wednesday in New York. The pound GBPUSD, +0.1287% rose to $1.3221 from $1.3205 on Wednesday.
What is driving the market?
European markets traded higher as investors continued to watch developments in the trade spat between the U.S. and China. Global stock indexes tumbled on Wednesday after news late Tuesday that the Donald Trump administration is planning to hit Chinese goods with another $200 billion in tariffs, seen as further deepening the rift with Beijing.
However, late Wednesday Bloomberg reported that U.S. and Chinese officials are open for resuming high-level trade talks, which could end with a bilateral solution to the trade dispute.
What are analysts saying?
“While equity markets in the U.S. and Europe followed Asian markets lower yesterday in response to Trump’s proposals for additional tariffs, investors appear today to have adopted a much more positive stance about the prospects for an eventual resolution of the conflict,” said analysts at Daiwa Capital Markets in a note.
What’s new in economics?
The U.K. government published its 120-page white paper on Brexit later on Thursday. The document lays out more detail on Prime Minister Theresa May’s plan for the U.K.’s future relationship with the European Union, which was agreed at a Cabinet meeting last week.
The plan, however, sparked a revolt in the government’s inner circles, with both Foreign Secretary Boris Johnson and Brexit minister Davis Davis resigned in protest over May’s vision.
In other U.K. news, U.S. President Trump is slated to arrive in Britain on Thursday for a two-day visit.
In Germany, the final reading on inflation in June showed consumer prices rose 2.1% year-on-year last month, down from 2.1% in May.
Eurozone industrial inflation data are due at 10 a.m. London time, or 5 a.m. Eastern Time. Minutes from the European Central Bank’s June meeting showed unanimous support of policy proposals that laid out the framework for eventually hiking rates in 2019 and ending its bond-buying program but the ECB members emphasized a cautious approach to unwinding its quantitative-easing measures.
Shares of Sky PLC SKY, +3.41% rose 3.4% after Comcast Corp. CMCSA, +1.67% raised its takeover offer for the British broadcaster, heating up the bidding war with 21st Century Fox Inc. FOXA, -0.73%
Gerresheimer AG GXI, +7.48% rallied by 7.6% after the German medical-packaging company said it sees a strong second half ahead.