European Shares Rise as Trade Respite Boosts Market Sentiment

European shares closed higher as U.S. President Trump's tariff exclusions on Chinese imports boosted risk sentiment. The STOXX 600 rose 2.7%, with financials leading gains. Germany's Deutsche Bank, Standard Chartered, and others saw significant boosts. The market is closely watching upcoming ECB policy decisions amid ongoing tariff developments.

European shares surged on Monday, with wide-ranging gains as risk-taking strengthened following U.S. President Donald Trump's tariff exclusions on Chinese imports of smartphones and computers. The pan-European STOXX 600 rose by 2.7%, marking a recovery after a challenging week and pulling the index up from recent lows.

Financial stocks were pivotal in driving the upward momentum, with Germany's Deutsche Bank and Britain's Standard Chartered among the notable gainers in this sector. Chip-related companies also saw an uptick following the tariff relief, with Infineon and others benefiting from the news.

Despite these gains, markets remain cautious as European investors await the European Central Bank's policy meeting, where a 25-basis-point rate cut is widely expected. This anticipation comes as global markets continue to grapple with the implications of ongoing tariff negotiations.

(With inputs from agencies.)