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UPDATE 1-European shares tick up as U.S.-China trade deal offers some relief

UPDATE 1-European shares tick up as U.S.-China trade deal offers some relief
Representative image Image Credit: Flickr

European shares rose on Thursday after the United States and China signed an eagerly awaited Phase 1 trade deal, giving some relief to markets that have been roiled by the 18-month standoff between the world's two largest economies.

The pan-European STOXX 600 index was up 0.3% by 0857 GMT. The deal, signed in Washington on Wednesday, still raises questions over the daunting purchase commitments of U.S. goods by China, while leaving existing tariffs in place.

However, the prospect of no further escalation in the economically damaging trade war encouraged a slight risk-on mode. "The details that were released after the signing was pretty much in line with what markets expected. There wasn't anything suggesting that the deal would over-deliver," said Simona Gambarini, markets economist with Capital Economics in London.

European utility stocks touched their highest levels since late-2008 on strength in power generator RWE AG. Shares of the company rose amid reports that the German government plans to compensate RWE with around 2.6 billion euros ($2.9 billion) for costs related to the country's planned coal exit. The European retail subindex gained 0.6%, led by an 11% rise in German meal-kit delivery company HelloFresh after it flagged a stronger 2019.

The stock was also the best performer on the STOXX 600. German shares rose 0.4% after closing lower a day earlier on dismal GDP data.

Economic growth in the euro zone's largest economy slowed sharply in 2019, highlighting the widespread impact of the trade war on demand for exports from the manufacturing-heavy country. Oil and gas stocks rose, tracking a rise in oil prices as the trade deal pointed to more Chinese purchases of American energy products, while a drop in U.S. crude inventories also helped.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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