FRANKFURT: European shares rose on Tuesday, buoyed by gains in the healthcare and luxury sectors, but the uptick was tempered by lingering uncertainties over US President Donald Trump’s proposed tariff measures following his inauguration.
The pan-European STOXX 600 closed up 0.4% at 525.98 points - its highest level in three months. This marks its fifth consecutive day of gains, the longest winning streak it has seen in over a month.
Heavyweight healthcare was the biggest boost, with a 1.5% rise, with drugmaker Novo Nordisk advancing 4%.
Luxury stocks gained 1.5%, boosted by a 5.3% jump in Burberry.
“The luxury sector is back in vogue after spending a few months in the penalty box,” Bernstein said.
Personal and household goods was also among the top winning sectors, adding 1.2%.
Around the globe, markets buzzed with anticipation at the dawn of Trump’s presidency. While he refrained from immediately imposing tariffs upon taking office, but said he was thinking about imposing 25% duties on imports from Canada and Mexico on Feb. 1.
Trump also revealed his plans to reverse the US trade deficit with the European Union, either with tariffs or more energy exports.
“President Trump spared China and the EU. No increase in levies on China or new ones on Europe lowers tensions,” however, the uncertainty over tariffs is the biggest handicap for European trade and investment,” Societe Generale analysts said in a note.
The U.S dollar regained some ground, while the Euro slipped.
European automakers came under pressure. Shares of Volkswagen, BMW and Stellantis slipped between 0.8% and 2% on uncertainty over possible new tariffs.
Basic resources dipped 1%, tracking lower metal prices.
“Market is clearly on edge at this point about what comes next,” said Chris Beauchamp, chief market analyst at IG Group, adding that there is a sense that this administration will “take a hard line on tariffs, but implementation of course takes a while.”
The European Union signalled its readiness to engage and negotiate with US President Donald Trump on Tuesday, warning of the need to avoid a trade conflict that would hurt both sides and the global economy.
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