Published by Global Banking & Finance Review®
Posted on June 4, 2025
2 min readLast updated: January 23, 2026
German stocks surged as Berlin approved a €46 billion tax relief package, boosting European markets. STOXX 600 touched a one-week high amid economic optimism.
By Medha Singh, Sanchayaita Roy and Ragini Mathur
(Reuters) -European stocks closed higher on Wednesday, buoyed by Berlin's approval of a 46 billion euro ($53 billion) corporate tax relief package aimed at kick-starting growth.
The relief package, the first of a broader series of measures from Berlin's new government, is an attempt to prevent the struggling economy from shrinking for a third consecutive year.
Recent surveys saw May's euro zone business activity barely creep into expansion, while Germany's services sector recorded its steepest contraction in over two years.
Germany's blue-chip index finished 0.8% higher, just off an all-time high it hit earlier in the session.
Other bourses, such as France's posted a 0.5% gain, while Britain's saw a 0.2% rise, and Spain's slipped 0.2%.
The pan-European STOXX 600 closed up 0.5% after briefly touching a one-week high.
An undercurrent of caution persisted as Washington's decision to double tariffs on steel and aluminum imports cast a long shadow, amplified by the looming deadline for countries to present their offers to U.S. President Donald Trump to avoid higher tariffs.
Adding to the complex geopolitical backdrop, the U.S. and China are set for high-stakes trade talks this week.
Attention will also turn towards the European Central Bank's policy meeting on Thursday, where a quarter-point rate cut is almost fully baked-in.
"Softer inflation and looming ECB rate cuts continue to support STOXX 600 valuations, though the upside in most of these names can't match the momentum of U.S. tech leaders," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Wall St. indexes rose, supported by a gain in tech stocks. [.N]
Most European sectors rose, with Technology leading gains. The food and beverages sector rose 1.1% buoyed by a 6.4% rise in Campari
Among individual movers, Airbus SE shares rose 2.2% after Bloomberg News reported Chinese airlines are considering ordering hundreds of aircraft as soon as next month.
STMicroelectronics jumped 11.1% after its chief executive said the French-Italian chipmaker has seen signs of an upturn.
B&M fell 14.7% after the British discount retailer reported a disappointing annual profit and said its full-year sales came in short of expectations on weak demand from UK consumers.
($1 = 0.8754 euros)
(Reporting by Medha Singh, Sanchayaita Roy Ragini Mathur and Pranav Kashyap in Bengaluru; Editing by Janane Venkatraman, Alexandra Hudson)
The tax relief package aims to kick-start growth in Germany's struggling economy and prevent it from shrinking for a third consecutive year.
European stocks closed higher, with Germany's blue-chip index finishing 0.8% higher and the pan-European STOXX 600 closing up 0.5%.
Most European sectors rose, with Technology leading the gains, and the food and beverages sector increased by 1.1%.
Washington's decision to double tariffs on steel and aluminum imports and upcoming high-stakes trade talks between the U.S. and China are casting a shadow over the markets.
Attention will turn towards the European Central Bank's policy meeting, where a quarter-point rate cut is almost fully anticipated.
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