European Shares Climb Amid Healthcare Boost Despite Trade War Fears

European shares experienced gains driven mainly by healthcare stocks, despite fears of an escalating U.S.-EU trade war. The STOXX 600 index increased by 0.4% amid hopes of a Ukrainian ceasefire and cooler U.S. inflation. However, tensions surrounding U.S. tariffs on European goods pose risks to economic growth.

European shares saw an uplift on Thursday, buoyed by a rise in healthcare stocks, notwithstanding persistent investor apprehensions about U.S. President Donald Trump potentially escalating a global trade war.

The pan-European STOXX 600 increased by 0.4% as of 0948 GMT, extending its gains after closing 0.8% higher on Wednesday. This was driven by optimism about a possible ceasefire in Ukraine and a milder than expected U.S. inflation report. Heavyweight healthcare stocks led the charge with a 1.1% increase, bolstered by Novo Nordisk's 3.6% rise after Kepler Cheuvreux upgraded its rating to 'buy' from 'hold'.

However, the index of automobiles and parts restrained overall gains, sliding 0.8% as shares of carmaker Stellantis and supplier Valeo dropped 1.4% and 3.1% respectively. Trump's threat on Wednesday to intensify the global trade conflict with more tariffs on EU goods added to market volatility. Rabobank's senior market economist Teeuwe Mevissen noted that investor concerns over potential trade tensions developing into a full-blown trade war remain significant.

(With inputs from agencies.)