Published by Global Banking and Finance Review
Posted on February 10, 2025
By Nikhil Sharma and Johann M Cherian
(Reuters) -Europe's benchmark index settled at an all-time high on Monday, boosted by energy stocks, while markets weighed U.S. President Donald Trump's warning of fresh tariffs on all steel and aluminium imports into the United States.
The pan-European STOXX 600 index gained 0.6%, with the oil and gas index leading sectoral gains with a 1.5% advance.
London-listed BP jumped 7.3%, its biggest one-day rise in over two years, after a report said Elliott Investment Management had built a stake in the company, aiding expectations the activist investor will drive strategy changes at the energy giant.
The stock also helped Britain's blue-chip index FTSE 100 clinch a record high, while higher crude prices further aided the energy sector. [O/R]
On Sunday Trump said he would announce new 25% tariffs on all steel and aluminium imports, along with other reciprocal tariffs on all countries this week.
Steel stocks ArcelorMittal dipped 0.6% and Voestalpine fell 1%. European steelmakers account for about 15% of imports into the United States.
"Our view in tariffs remain that they will cause volatility, are a negotiating tool and will eventually be not as bad as feared. However, we do see scope for further volatility over the coming weeks with Europe likely be the next target for tariffs," said Mohit Kumar, economist at Jefferies.
European Central Bank President Christine Lagarde said trade frictions would make the euro zone's inflation outlook "more uncertain".
Against a backdrop of tariff uncertainty, the STOXX 600 logged its seventh straight weekly advance on Friday as investors focussed on earnings, although automakers in Europe have struggled against the volatile backdrop.
Among others, GTT Group fell 4% after the French engineering company's CEO Jean-Baptiste Choimet resigned.
Kongsberg Gruppen dropped 6.2% to the bottom of STOXX 600 after Pareto lowered its rating on the stock to 'hold' from 'buy'.
Poland's KGHM rose 5.8% after the country's Finance Minister said it plans to reduce copper output tax from 2026, which may be extended beyond 2027.
Spanish train maker Talgo <TLGO.MC> jumped 7.1% after Poland's state-owned investment fund PFR said it planned to join the bidding for the manufacturer of AVE high speed trains.
Developments around the Russia-Ukraine war were also in focus after Trump said he believed he was making progress with Russian President Vladimir Putin on ending the conflict.
(Reporting by Nikhil Sharma and Johann M Cherian; Editing by Mrigank Dhaniwala, Varun H K and Christina Fincher)
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