European Stocks Rebound Amid Trade Tensions

European shares recovered from recent declines in early trading Tuesday, driven by investor wariness over tariff developments. The STOXX 600 rose 1% after a sharp dip due to recession fears. Counter-tariffs proposed by the European Commission added volatility, but the banking sector saw gains.

European shares rebounded on Tuesday following a precipitous fall over the past four sessions, sparked by escalating trade tensions. Investors remain alert to tariff-related developments, contributing to the volatility in markets.

The pan-European STOXX 600 index climbed 1% by 0709 GMT. This recovery followed a 12.1% drop, with fears of a looming global recession exacerbated by the escalating trade war. The index has decreased 17.9% since reaching its peak on March 3.

Germany's index rose 0.8%, narrowly avoiding confirmation of a bear market. Amid the trade war, the European Commission suggested counter-tariffs of 25% on various U.S. goods. The banks index rose by 1%, while investors moved towards defense shares, with the latter seeing a 3% increase, marking it as the top-performing sector this year. Infineon Technologies fell 1.6% after announcing its acquisition of Marvell Technology's automotive ethernet business to bolster its microcontroller offerings.

(With inputs from agencies.)