Europe close: Stocks hit seven-week high after productive US-China trade talks

(Sharecast News) - European stock markets surged to a seven-week high on Monday as investors' appetite for risk increased on the back of productive trade talks between the US and China.

The world's two largest economies confirmed that a key agreement was struck in Geneva over the weekend, with both parties cutting levies for the next 90 days. Washington will reduce tariffs on Chinese goods to 30% from 145%, while Beijing will lower duties to 10% from 125%.

The Stoxx 600 benchmark rose 1.1% to 544.1 - the highest close for the index since 27 March, trading at levels seen before Donald Trump unleashed his tariff war with America's trading partners.

Gains of more than 1% were seen in Paris and Milan, while markets in London, Frankfurt and Madrid finished with more moderate increases. Nevertheless, Germany's DAX benchmark still manage to eke out a new record-high close, rising 0.2% to 23,551.55.

"The pause button has once again been pressed on the most onerous tariffs threatening the world economy," said Hargreaves Lansdown analyst Susannah Streeter.

"The European Union is still in the queue when it comes to striking a trade deal. Although there are hopes that just like the UK and China, a sharp de-escalation will be achieved, it is far from conclusive."

Market movers

Shares in shipping giants AP Moeller Maersk and Hapag-Lloyd jumped 11% and 12% respectively on hopes that global trade would pick up as a result of the US-China agreement.

Cranswick shares fell sharply after the food producer was forced to suspend staff at one of its pig farms in response to an undercover investigation which revealed several animal rights abuses. Cranswick is the leading meat supplier to Britain's Big Four supermarkets, who all reportedly suspended supplies from the farm.

Shares in pharmaceutical companies fell after president Trump threatened to sign an executive order to slash the price of prescription drugs for Americans. AstraZeneca, GSK, Novo Nordisk, Roche, Sanofi, Sandoz and Haleon were all lower.

Weapons makers were down after after Ukrainian president Volodymyr Zelenskyy said he was ready to meet his Russian counterpart Vladimir Putin in Turkey on Thursday. Hensoldt, Rheinmetall, Dassault Aviation and Saab all fell on the news.

Italian bank UniCredit surged after reporting its strongest quarterly performance on record, posting first-quarter net profit of �2.8bn, driven by higher fees and trading income, lower provisions, and tight cost control.

Spanish peer Banco de Sabadell also rose on reports it is considering a potential merger with smaller lender Abanca as it attempts to fend off a hostile takeover by sector giant BBVA.