Investing.com - European stock markets rose Friday, rebounding after recent losses as investors monitored a potential ceasefire deal for Ukraine, while U.S. President Donald Trump’s trade tariffs remained in focus.
At 06:20 ET (10:20 GMT), the DAX index in Germany climbed 0.8%, the CAC 40 in France traded 0.7% higher, and the FTSE 100 in the UK rose 0.5%.
Weekly losses on trade war worries
European stocks have edged higher, rebounding to an extent from the week’s sharp losses which have been driven by the potential for a global trade war, likely impacting the already struggling regional economies.
Earlier this week, the EU announced it would retaliate to President Trump’s 25% tariffs on steel and aluminum with countermeasures, taking aim at clothing, alcohol and industrial goods imported from the United States.
Trump promptly raised the ante, threatening on Thursday to slap 200% duties on champagne and spirits originating from the bloc, raising concerns that regional and global growth could take a major hit.
"If we were to go to a real trade war, where trade would be dampened significantly, that would have severe consequences," European Central Bank President Christine Lagarde said on Friday on BBC’s HARDTalk programme. "It would have severe consequences for growth around the world and for prices around the world."
Data released earlier Friday showed that Britain’s gross domestic product contracted unexpectedly by 0.1% in January, a sharp weakening from the 0.4% monthly growth seen at the end of last year, and below the monthly expansion of 0.1% expected.
German inflation fell to 2.6% in February, a revision from the preliminary release that reported that annual inflation, harmonised to compare with other European Union countries, had remained flat in February for the second month in a row at 2.8%.
Sentiment boosted by potential Ukraine ceasefire
However, sentiment has received a minor boost by the talks aimed at agreeing a ceasefire deal, potentially ending the war between Ukraine and Russia.
The U.S. and Ukraine agreed to a 30-day ceasefire in principle during their meeting in Saudi Arabia earlier in the week. But Russian President Vladimir Putin sought a number of clarifications and conditions that appeared to rule out a quick end to the fighting.
BMW faces large profit hit
In the corporate sector, BMW (ETR:BMWG) stock fell 1% after the German auto giant reported a sharp drop in net profit in 2024, after weak sales in China and Germany as well as delivery hold-ups, because of problems with a brake, dented performance.
BMW’s Chief Financial Officer also indicated that the added tariffs on U.S. imports imposed up until March 12 would reduce its earnings margin in the autos segment by one percentage point.
Daimler Truck (ETR:DTGGe) reported a drop in financial performance for 2024 compared to the previous year, with the company facing challenges primarily in its European markets, while its North American and Daimler (OTC:MBGAF) Buses segments remained strong.
Crude edges higher
Oil prices rose Friday, after U.S. President Donald Trump tightened sanctions on Iranian oil and shipping, bouncing after the previous session’s losses amid Russia-Ukraine ceasefire talks and escalating trade tensions.
At 04:05 ET, Brent futures rose 1% to $70.61 a barrel, while U.S. West Texas Intermediate futures rose 1.1% to $67.33 a barrel.
Both contracts slumped over 1% during Thursday’s session.
The Trump administration intensified its "maximum pressure" campaign against Iran on Thursday by imposing sanctions on Iranian Oil Minister Mohsen Paknejad and targeting entities and vessels associated with Iran’s "shadow fleet," which is used to circumvent existing oil sanctions.