Trade war truce triggers surge in European shares

Miners, autos, tech, and oil stocks all surged on Monday, driving Europe's main benchmarks up strongly after U.S. and Chinese leaders agreed a temporary truce in an ongoing trade war which has roiled global financial markets.

Germany’s DAX (GDAXI) – the most sensitive to China and trade war fears – led the way with a 2.5 percent rise, hitting its highest level since Nov 14. The pan-European STOXX 600 (STOXX) climbed 1.9 percent, on track for its strongest day in eight months.

Financials were the biggest boost to European shares as China-exposed bank HSBC (L:HSBA) rose and lenders across the region cheered the prospect of a détente in a trade war, which has dented world economic growth prospects.

Mining stocks (SXPP) led gains with a 5 percent rise as metals prices surged on the news which gives China, the world's biggest metals consumer, more wiggle room in the next few months.

Antofagasta (L:ANTO), Anglo American (L:AAL), and Glencore (L:GLEN) were among the top European gainers, up 6.1 to 6.9 percent.

Car stocks (SXAP), which have been battered by fears of rising tariffs, jumped 4.2 percent after Trump said that China had agreed to cut import tariffs on American-made cars.

German carmakers Daimler (DE:DAIGn), BMW (DE:BMWG), and Volkswagen (DE:VOWG_p) climbed 4.8 to 6.2 percent while auto suppliers also rose. Tyre maker Continental (DE:CONG) gained 4.1 percent and Faurecia (PA:EPED) was up 6.9 percent.

The oil sector (SXEP) also jumped 2.6 percent as crude soared on the trade war truce and ahead of this week’s OPEC meeting, expected to result in a supply cut.

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