Europe's STOXX 600 clocks second consecutive monthly loss hit by tariff woes

By Sukriti Gupta and Nikhil Sharma

(Reuters) -European shares closed higher in a volatile session on Wednesday as investors assessed key data around the world and corporate earnings, ending a sluggish month marred by President Donald Trump's erratic tariff policy.

The pan-European STOXX 600 index closed 0.3% higher on Wednesday, helped by a 1.3% rise in healthcare stocks.

The benchmark index marked its second consecutive monthly drop, however, falling 1.3%. Energy was the worst-performing sub-index for April, down 10.2%, as the uncertainty around global growth eroded the outlook for oil demand.

The STOXX 600 has recouped more than half of its losses after tumbling nearly 18% from record highs earlier this month, on signs of the White House's willingness to ease trade tensions.

Earlier this week, Trump softened the blow of his auto tariffs, with Commerce Secretary Howard Lutnick saying the President had reached one trade deal with one foreign power.

"There's scope for a gradual softening from where we were after the announcement on April 2nd," said Richard Flax, chief investment officer at Moneyfarm, but pointed out that tariffs would inevitably be "higher than we had three months ago".

On the day, rate-sensitive real estate stocks jumped 1.1% as euro zone government bond yields dropped after a mixed batch of economic data both in Europe and the U.S.

Gross domestic product decreased at a 0.3% annualized rate last quarter in the United States due to higher imports before the import duties kicked in.

But the euro zone economy grew faster than expected in the first quarter while inflation declined, starting 2025 on an upbeat note before successive blows from the U.S. trade war, a surging euro and deteriorating sentiment.

Earnings outlook improved, with estimates showing an average drop of 1.7% in the first quarter, better than the 3.5% drop expected a week ago, according to LSEG data.

Societe Generale rose 3.7% after the French bank reported stronger-than-expected first-quarter earnings.

Danish logistics group DSV advanced nearly 7.8% after it completed a deal to acquire Germany's Schenker and provided an outlook on potential benefits from the transaction.

On the downside, Glencore fell 7.3% after the miner and trader reported a 30% drop in copper production in the first quarter.

Evolution slumped 19.3%, the worst individual performer on STOXX 600, as the Swedish gaming technology company reported its first-quarter earnings below estimates.

German carmakers Mercedes and Volkswagen suspended and cut guidance amidst uncertainty over U.S. tariffs. Their shares were down 2.7% each.

(Reporting by Sukriti Gupta and Nikhil Sharma in Bengaluru; Editing by Sherry Jacob-Phillips and Alex Richardson)