Europe close: Stocks inch higher as trade war concerns ease

(Sharecast News) - European stocks finished Tuesday's session with marginal gains on Tuesday, registering their fourth day in positive territory, though the mood was certainly more cautious with markets trading at seven-week highs.

The Stoxx 600 benchmark index closed just 0.1% higher at 545.02, having traded within a tight range for most of the session, its highest since 27 March.

After the unprecedented market sell-off last month following the start of the US trade war, which sent the Stoxx 600 to 469.89 on 9 April - its lowest in more than a year - the index has since jumped 16%.

A decent performance in Madrid tempered by a flat showing in London and mild gains in Paris, Milan and Frankfurt. Notably, however, Germany's DAX still managed to knock out another record closing high, up 0.2% on the day at 23,619.59.

Investor risk appetite was more subdued after a strong surge across global stock markets on Monday as a temporary truce in US-China trade talks was agreed at the weekend, with both nations lowering levies for 90 days as they continue negotiations.

US stock markets opened mostly higher after of the all-important CPI report for April, which showed that inflation unexpectedly slowed last month, on both the headline and core level.

On this side of the Pond, UK unemployment rose to its highest level in nearly four years, rising to 4.5% in the January to March period, up from 4.4% previously. Meanwhile, annual growth in average weekly wages was 5.6%, excluding bonuses, down from 5.9% and broadly in line with expectations.

German investor sentiment improved more than expected in May, according to a survey released by the ZEW Center for European Economic Research in Mannheim. The economic sentiment index rose to 25.2 from -14 in April, coming in above expectations for a reading of 11.9, while the current situation index declined to -82 in May from -81.2 the month before.

Market movers

Renewable energy stocks were surging, including Vestas Wind Systems, EDP Renováveis and Orsted, on speculation that the proposed phase-out of president Biden's incentives on US clean energy projects won't be as severe as feared.

Pharma giants Bayer and Grifols were putting in decent gains after Donald Trump's executive order to cut prescription drug prices on Monday was largely deemed softer than expected. Bayer was also rising after reporting better-than-forecast earnings, helped by sales of its new cancer and kidney treatments.

London-listed sales and marketing services outfit DCC fell 6% after underwhelming with its full-year results, which revealed a 5% rise in adjusted operating profit and plans to return £800m to shareholders.

Meanwhile, gambling group Entain rose strongly after a UBS upgrade to 'buy' from 'neutral'. The broker said the Ladbrokes owner has been steadily progressing on its key operational frontiers over the past year, yet the shares have underperformed, declining 8% in a rising sector.