Major bourses in Europe were higher on Monday, with the STOXX 50 jumping about 1.8% to surpass the 5,200 mark and the broader STOXX 600 rising 1.1%, tracking a rally in global stock markets after both the US and China agreed on substantial tariff cuts following trade negotiations held over the weekend in Switzerland.
European shares rise on US-China trade deal
Under the deal, the US will reduce tariffs on Chinese goods from 145% to 30% for a 90-day period, while China will lower its tariffs on US imports from 125% to 10% for the same duration. The announcement marks a significant de-escalation in the trade war, easing fears of a prolonged global economic downturn and signaling a willingness on both sides to pursue compromise rather than escalate tensions further.
The trade truce lifted sentiment across cyclical and trade-sensitive sectors, with basic resources, autos, technology, and oil and gas leading gains, reflecting optimism about improving global demand. Shares of miners and energy companies rose as commodity prices rebounded, while automakers climbed amid hopes that easing tariffs would revive global trade flows. Technology stocks also gained, supported by easing concerns over supply chains and semiconductor exports.
Healthcare stocks underperformed
On the other hand, the healthcare sector underperformed, dragging on the broader index. Shares of Novo Nordisk tumbled almost 8%, AstraZeneca dropped around 4%, and GSK lost nearly 3%, after US President Donald Trump announced plans to sign an executive order this week to align US prescription drug prices with those paid in other advanced economies, potentially denting the profitability of major drugmakers.
Elsewhere, investors also eyed key economic data releases this week, including US inflation, EU industrial production, and German economic sentiment, while keeping an eye on further developments in US-EU trade talks, with some media reports suggesting that progress on reducing auto tariffs could follow the US-UK deal finalized last week.
