(Bloomberg) — European stocks rose, with auto stocks rallying the most in more than two months after the European Union and China agreed to start talks about proposed electric vehicle tariffs.
The Stoxx 600 Index closed 0.8% higher, while the autos subindex rose 1.8%, cheered by news that the two sides would discuss the EU’s plans to levy tariffs on EVs shipped from China. Volvo Car AB and BMW AG were the biggest outperformers, with gains of almost 7% and 3% respectively. Porsche AG, Volkswagen AG and Stellantis NV gained more than 1.5%.
The banks’ subindex, meanwhile, rose more than 2%, with France’s Societe Generale SA an BNP Paribas SA among the big gainers as Banque de France chief Francois Villeroy de Galhau said French banks are “very solid” despite the selloff triggered by the June 9 snap election call.
Meanwhile, Eurofins Scientific SE shares plunged 19% after the testing company was targeted by Carson Block’s Muddy Waters Research. SIG Plc shares sank after it lowered its full-year guidance due to subdued demand. Argenx SE soared after Vyvgart Hytrulo shot gained US approval to treat a rare nervous system disorder, a win for the biotechnology firm after a series of setbacks.
However, markets remain on edge ahead of the first round of the French election on Sunday, with opinion polls showing that the far-right National Rally party is gaining traction. Banks, highway operators and utilities are among the sectors vulnerable to the potential change in the balance of power in France.
“We continue to see heightened political uncertainty weighing on European stocks,” said Marija Veitmane, senior multi-asset strategist at State Street Global Markets. While selling by institutional investors has not accelerated since the election, “elevated positions suggest that it can continue,” she added.
Among other major corporate news, Prudential Plc gained after it launched a $2 billion share buyback program, as the insurer outlined progress that includes the potential for further shareholder returns. Covestro AG also jumped after it entered concrete negotiations with Abu Dhabi National Oil Co. for a takeover that could value the German chemical company at €11.7 billion ($12.5 billion).
In Germany, business outlook declined for the first time in five months — a sign that the gradual recovery in Europe’s biggest economy faces headwinds.
For more on equity markets:
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- US Stock Futures Little Changed
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