Europe close: Stoxx 600 benchmark hits two-month high

(Sharecast News) - European stocks rose solidly on Tuesday on the back of rising hopes of a ceasefire between Ukraine and Russia, a rate cut in China to spur consumer spending and a drop in German whole prices.

The Stoxx 600 finished 0.8% higher at 554.41, with decent gains across the continent. Madrid's Ibex 35 in particular surged 1.7% to close at its highest level since 2008, while Frankfurt's Dax reached another record high. As for the Stoxx 600, this was the highest close for the benchmark since 19 March.

Helping sentiment were comments from Donald Trump who said that Russia and Ukraine would "immediately" start ceasefire talks, though Volodymyr Zelensky accused Moscow of putting forward "unrealistic conditions and undermin[ing] progress".

Meanwhile, German producer prices declined at a 0.9% annual rate in April, with deflation speeding up from the 0.2% fall in March. This was the sharpest drop in whole prices since October and under the consensus estimate of -0.6%.

"Global markets continue to climb, with Germany's DAX 40 reaching a new record high as German producer prices fall the most in six months and the UK's FTSE 100 reaching a near three-month high, driven by strong earnings reports from companies like Greggs and Vodafone," said Axel Rudolph, senior technical analyst at IG.

Central bank news

The People's Bank of China slashed its one-year loan prime rate (LPR), a key reference for household and business lending, to 3% from 3.1%, while the five-year LPR, which is used for mortgages, was cut by 10 basis points to 3.5%. Economic growth has been anaemic on the back of weak consumer demand and an ongoing crisis in the property sector.

Australia also cut rates to a two-year low, citing cooling inflation and an extremely uncertain outlook thanks to US President Donald Trump's erratic tariff policies. The Reserve Bank of Australia cut its main cash rate by 25 basis points to 3.85% and remained cautious on further easing after a two-day policy meeting.

In other central bank news, the Bank of England's chief economist, Huw Pill, argued that the pace of interest rate cuts has been too fast in the face of ongoing wage pressures. Speaking at a briefing at Barclays on Tuesday, Pill said: "I remain concerned that structural changes in the price and wage setting behaviour have increased the intrinsic persistence of the UK inflation process."

Market movers

In the UK, shares in Vodafone Group surged 7% as the telecoms giant confirmed financial guidance and unveiled a new �2bn share buyback after completing a similar-sized programme. Full-year results from the company were in line with expectations, with revenue and adjusted EBITDA up year-on-year.

London-listed bakery chain Greggs also jumped 9% after reporting a rebound in sales, driven by an extended range of products. LFL sales were up 2.9% over the first 20 weeks of the year despite a slow start to 2025.

Elsewhere, shares in renewable energy firms Oersted and Vestas Wind jumped after the Trump administration lifted a stop-work order on a major offshore wind facility planned off the coast of New York.