Europe close: Stocks higher despite tariff uncertainty as DAX jumps

(Sharecast News) - European stocks finished mostly higher on Monday despite ongoing tariff-related uncertainty, as strong gains in Frankfurt offset some weakness in London.

The Stoxx 600 index closed up 0.4% at 543.5, helped by a 1.2% surge on Germany's DAX and solid gains from benchmark indices in Italy and Spain (both up 0.7%). The FTSE 100 however fell 0.2% with falls in the heavyweight oil and mining sectors weighing on the index.

US president Donald Trump was very much the centre of the market's attention on Monday, as investors digested his latest tariff threat outburst and yet another extension to the pause in planned American import duties.

"Now that the tariff deadline appears to have been pushed back to August, it looks like the US administration remains very lukewarm about actually implementing fresh levies," said Chris Beauchamp, chief market analyst at IG.

"Leaving the potential for tariffs on the table gives Trump some leverage, and lets him talk a good game, but without the damage that would be inflicted by actually implementing them."

Trump threatened an extra 10% tariff on countries that aligned themselves with what he called the "Anti-American policies of BRICS", without specifying what his grievances were.

The bloc includes Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, United Arab Emirates, Ethiopia, Indonesia and Iran. It is currently meeting in Brazil and on Sunday issued a joint statement, warning against "unjustified unilateral protectionist measures, including the indiscriminate increase of reciprocal tariffs".

Trump also shifted his deadline for countries to agree a trade deal with the US to August 1 from July 9.

In economic news, industrial production Germany rose by 1.2% in May after seasonal and calendar adjustments, following a revised 1.6% slump in April, Destatis reported. Meanwhile, eurozone retail sales dropped 0.7% in May, according to Eurostat, following April's upwardly revised 0.3% growth rate, in line with market expectations.

Shell slumps

Shell was the worst performer in London the energy major cut the top end of its guidance for gas and liquified natural gas production in the second quarter. Dan Coatsworth, investment analyst at AJ Bell, said: "Shell's latest quarterly results teaser has created trepidation that the numbers will be a dud."

BP also fell, along with European peers Sanofi and TotalEnergies.

French IT services firm Capgemini fell sharply as it agreed to buy technology outsourcing company WNS for $3.3bn in cash to move into the AI market.

Financial stocks in Frankfurt were providing a boost, with Deutsche Bank in particular rising after announcing a restructuring of its domestic wealth management arm. The unit will consolidate its services for wealthy and high-net-worth clients, bringing previously separate client segments under a single management team, as it looks to increase market share in the sector.

German financials Commerzbank, Allianz and Deutsche Boerse were also performing well.