April 5, 2018 / 7:37 AM / 3 months ago

Trade war relief rally lifts European stocks

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LONDON, April 5 (Reuters) - European stocks jumped on Thursday as investors bought back into risky assets in a global relief rally as concerns over trade war ebbed.

The STOXX 600 rose 1.5 percent to a two-week high in early deals, buoyed by financials and industrials stocks, riding the wave of gains which had pushed Wall Street and Asian stocks up overnight.

After the latest retaliatory blow from China against U.S. tariffs, investors’ reaction was more muted than expected, as some calculated a full-blown trade war would be averted.

Basic resources and tech stocks, the sectors seen as most vulnerable to a higher cost of trading, led gains.

Financials, the bellwether of investors’ perception of global market risks, provided the biggest boost. HSBC, BNP Paribas and Santander were top gainers, up 1.2 to 2.1 percent.

Video games maker Ubisoft jumped 6.7 percent, with traders and analysts pointing to the success of its latest video game Far Cry 5, which broke the franchise’s sales records.

Electrocomponents, Britain’s largest industrial distribution firm, gained 4.7 percent after results.

Citi strategists recommended investors “buy the dip” in stocks.

They also upgraded UK equities to “overweight”, arguing recent underperformance and cheap valuations made them attractive, and downgraded continental European equities to “neutral”. (Reporting by Helen Reid, editing by Julien Ponthus)

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