UPDATE 1-European shares rise as U.S.-EU trade breakthrough spurs carmakers

  • Reuters
  • Stock Market News
UPDATE 1-European shares rise as U.S.-EU trade breakthrough spurs carmakers
Credit: © Reuters.

* STOXX 600 up 0.6 pct, autos jump 1.7 pct

* U.S. and EU agree to work on lowering trade barriers

* Airbus, BATS rise after results; Nokia, Kion drop (Adds quote and detail, updates prices)

By Kit Rees

LONDON, July 26 (Reuters) - European stocks jumped in early trade on Thursday following a breakthrough in U.S.-EU trade talks, buoying shares in carmakers as the market also digested a flurry of company earnings reports.

The pan-European STOXX 600 index .STOXX was up 0.6 percent by 0817 GMT, while Germany's exporter-heavy DAX .GDAXI , which has come under pressure due to uncertainty over global trade relations, rose 1.5 percent.

The rally followed a meeting on Wednesday between Donald Trump and European Commission President Jean-Claude Juncker, in which the U.S. president agreed to refrain from imposing tariffs on European cars while the two sides look to cut other trade barriers, easing the threat of a transatlantic trade war. will be cautiously optimistic in respect of the announcement yesterday, but will also remember what happened with respect to China," Alastair George, investment strategist at Edison, said.

"Whether it's anything more than a temporary suspension of hostilities or the start of something more significant remains to be seen."

European autos .SXAP were the biggest sectoral gainers, up 1.7 percent. The sector has been hit particularly hard, with tariff threats forcing carmakers on both sides of the Atlantic to cut their guidance.

Shares in Fiat FCHA.MI , Porsche PSHG_p.DE , Volkswagen VOWG_p.DE and BMW BMWG.DE all rose by between 2.7 and 4.3 percent.

Daimler DAIGn.DE rose just 1.3 percent in volatile trade after its second-quarter profit was hit by weaker pricing and tariffs. a busy day of earnings, a number of market heavyweights saw significant share price moves. British American Tobacco BATS.L , Smith & Nephew SN.L , RELX REL.L and AstraZeneca AZN.L all rose by between 1.9 percent and 4.5 percent after giving updates, topping the FTSE 100 .FTSE , which traded flat.

Airbus AIR.PA led France's CAC .FCHI with a 5.2 percent gain after the aerospace group's second-quarter core profit doubled. in French hygiene services company Elis ELIS.PA were the biggest STOXX gainers, up more than 13 percent and on track for their best day ever after it reported first-half results and announcing an acquisition. NOKIA.HE was among the biggest STOXX fallers, tumbling nearly 9 percent after reporting weak profits, while Kion KGX.DE was down 7.7 percent after results. far around a quarter of MSCI EMU companies have reported second-quarter results, and more than half of those have either met or beaten analysts' expectations, according to Thomson Reuters I/B/E/S data.

Earnings growth is clocking in at 0.3 percent, though the blended estimate, which combines actual and estimated earnings, stands at 1.3 percent.

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