European Stocks Rally as Trump Delays Tariff Deadline

European shares gained after President Trump postponed heavy tariffs on the EU, leading to a 1% rise in the STOXX 600 index. The delay has relieved markets, boosting several sectors, though experts caution against high investor optimism. Public holidays in the US and UK limited trading volumes.

European shares rebounded on Monday, shaking off losses from the previous session, as the market reacted positively to President Donald Trump's decision to delay imposing a 50% tariff on the region.

The pan-European STOXX 600 index, which slumped by 0.9% on Friday after Trump's unexpected tariff threat, ended 1% higher. This uptick followed Trump's announcement on Sunday to extend the tariff deadline to July 9, giving the European Union more time for negotiations, as confirmed by Ursula von der Leyen, European Commission President.

Despite gains in the automobiles and parts index with a 1.8% rise, the sector was tempered by a 3.3% decline in Porsche. Defence stocks significantly boosted the index with strong performances from Rheinmetall and Leonardo. Investor sentiment improved, though experts warned against excessive optimism amid ongoing trade discussions.

(With inputs from agencies.)