U.S. Markets

European shares ride trade relief rally

LONDON (Reuters) - European shares surfed a worldwide rise in stock markets on Thursday as fading concerns about the trade war between the United States and China lifted investors into a risk taking mood.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 5, 2018. REUTERS/Staff

The pan-European STOXX 600 .STOXX closed up 0.7 percent while the leading euro zone stock index .STOXX50E scored its ninth straight session of gains, up 1.1 percent, its best performance in two months.

A positive open on Wall Street where the Dow Industrial Average reached a record high helped European indexes accelerate even if “these gains are merely side orders compared with the ongoing wealth creation seen in U.S. stocks”, IG analyst Chris Beauchamp said.

Autos .SXAP, banking .SX7P and mining .SXPP sectors led gains as investors stayed resolutely focused on hopes that the latest shots in the trade war could drive the dispute toward resolution.

Autos gained 1.8 percent, also helped by Kepler Cheuvreux upgrading its recommendation on the sector.

“On autos, valuations have reached historically low levels, pricing in a lot of bad news already,” wrote Kepler Cheurvreux strategists.

Shares in Belgian telecoms company Proximus PROX.BR climbed 2.5 percent, with traders saying Citi had upgraded its recommendation on the stock.

Lower levels of market volatility, meanwhile, hurt quarterly revenue at trading platform IG Group IGG.L, sending the stock down 9.8 percent to the bottom of the STOXX.

Belgian biotech firm Argenx ARGX.BR fell 4.6 percent in a second day of losses after a share offering.

On the small-cap front, German fashion retailer Tom Tailor TTIGn.DE issued a profit warning, sending its shares down 12 percent. The firm blamed Europe's exceptionally hot and long summer for slower growth.

Markets have shrugged off an escalation on Tuesday of the tariff war between the United States and China, focusing rather on the tariff levels being lower than expected and on hopes that the dispute may be nearing an end.

“Financial markets are likely to focus on the potential for an agreement between U.S. and Chinese officials that could reverse these tariffs,” wrote Goldman Sachs analysts.

Reporting by Helen Reid; Editing by Keith Weir