European shares climb after progress in Sino-U.S. trade talks

World
Europe

European shares rose on Friday amid encouraging signs from U.S.-China trade talks, after weak data from both countries sent world stocks into a dive.

Europe's STOXX 600 gained 0.8 percent, with German equities staging a strong recovery from early losses.

Talks between China and the United States this week made important progress, President Xi Jinping told top U.S. trade negotiators, and efforts to end their trade war would continue in Washington next week.

"The next potential steps in the U.S. protectionist push could be pivotal for the global outlook," Bank of America Merrill Lynch economists wrote in a note. "With the trade war already starting to hurt the U.S., we expect the Trump Administration to pull its punch."

Germany's main stock index, exposed to the Chinese economy because of its large number of exporters, climbed 0.7 percent by late morning after falling as much as 0.5 percent.

European car stocks, a bellwether for the continent's economy, also turned positive, gaining 0.5 percent after earlier falling one percent on declining sales and an approaching deadline for a U.S. Commerce Department report that could see tariffs imposed.

European stocks had earlier fallen after a U.S. report that retail sales had dropped in December to their lowest since 2009 and data on Chinese producer prices, which were little changed for a seventh straight month in January.

Source(s): Reuters