European stocks start second quarter on a positive note

Major European stock markets opened the second quarter on a positive note, with the STOXX 50 rising 0.7% and the STOXX 600 gaining 0.8%, marking their first advance in four sessions.

European stocks start second quarter on a positive note

This rebound comes after both indexes slumped around 1.5% in the previous session, reaching two-month lows. Investors appear to be gaining some confidence after recent market volatility, though they continue to closely monitor the ongoing trade war and its potential economic fallout. The so-called "Liberation Day" for the US is set for tomorrow, with President Donald Trump expected to unveil his highly anticipated reciprocal tariff plan. While details are still unclear, there remains considerable uncertainty surrounding the scope and impact of the proposed tariffs, leaving investors wary of possible disruptions in global trade. Meanwhile, inflation in the Eurozone showed signs of easing, slowing for the second consecutive month to 2.2%, driven in part by a deceleration in services inflation. While still above the European Central Bank’s target, this cooling of price pressures may reduce some concerns about further tightening in monetary policy. As a result, investors are weighing the implications of lower inflation on the region’s economic outlook and potential ECB actions in the coming months.

Several major European companies gain

On the corporate front, shares of several major European companies saw gains, reflecting optimism in key sectors. Shares of SAP rose by 1.7%, LVMH gained 1.1%, ASML Holding increased by 1.8%, and L'Oréal climbed by 1.8%, all contributing to the overall positive sentiment in the markets. The auto sector also posted solid gains, with Mercedes-Benz edging up by 0.2%, BMW advancing by 1.6%, and Volkswagen increasing by 1.6%. These gains came despite concerns over trade tensions, with investors possibly looking past short-term uncertainties in favor of the longer-term growth potential of these leading companies. Overall, European markets were able to regain some traction, although cautious sentiment remains as geopolitical and economic risks continue to unfold.