Europe’s STOXX 600 up, Germany’s DAX at record peak on trade deal optimism

European shares extended gains on Friday, with Germany’s DAX index closing at an all-time high, as signs of easing global trade war relieved investors as they looked ahead to discussions between the US and China over the weekend.

The pan-European STOXX 600 index ended 0.4 per cent higher. Frankfurt’s DAX index climbed 0.6 per cent and was up 1.7 per cent for the week.BP shares rose 4.4 per cent after a Financial Times report said Shell, Chevron, Exxon Mobil, TotalEnergies and ADNOC have “run the numbers” for a possible takeover of the oil major.

Energy and basic resources led the sector gains for the day, rising 2.0 per cent and 0.9 per cent, respectively.Automobiles, susceptible to tariffs-related headlines, rose 0.8 per cent and was among the best-performing sub-indexes for the week.

On the eve of US-China trade talks, President Donald Trump said China should open up its market to the United States as he asserted that 80 per cent tariffs on Chinese goods “seems right”. Beijing presently faces 145 per cent US import tariffs.

Top officials from the world’s two largest economies are holding negotiations in Switzerland on Saturday as they take steps to de-escalate their market-ravaging trade war.Washington will roll out dozens of trade deals over the next month but a 10 per cent tariff imposed on most countries will likely stay, US Commerce Secretary Howard Lutnick told CNBC on Thursday, as the US announced a limited bilateral trade agreement with the UK.

“There will still be a 10 per cent tariff on everything, even after they found this remarkable deal. So this means that other countries and also the EU might not be better off in the end,” said Jochen Stanzl, chief market analyst at CMC Markets.

“Everybody is cheering because one thing is clearer now that Trump is not returning to the reciprocal tariffs that he held up on ‘Liberation Day’.”

The STOXX 600 clocked its fourth straight weekly advance, making modest gains of 0.2 per cent in a busy week that saw the US Federal Reserve hold rates and the Bank of England deliver a quarter-point rate cut. The benchmark index has recovered from its sharp losses in early April when Trump unleashed and then offered a 90-day pause on universal levies on most trading partners.

Among individual stocks, Commerzbank rose 4.0 per cent after the German lender posted a surprise profit growth in the first quarter.

Mediobanca rose 5.4 per cent after its quarterly profit beat market forecast amid the investment bank’s attempts to fend off an unsolicited bid from smaller rival Banca Monte dei Paschi (MPS).Shares in Bavarian Nordic jumped 6.1 per cent after the Danish biotech firm’s first-quarter revenue beat market expectations.