European shares touch all-time peak on cross-Atlantic trade optimism

(Reuters) – European shares clocked a record closing high on Friday after EU Trade Commissioner Phil Hogan struck a positive tone on talks with Washington and on optimism over signs of resilience in China’s economy.

The pan-European STOXX 600 index rose as much as 1% to a record high of 424.90, marking its best week since Dec. 20.

Hogan said on Thursday he had a good exchange of views with U.S. Trade Representative Robert Lighthizer in Washington, underscoring Brussels’ desire to negotiate solutions for several open trade disputes between the United States and the EU.

The meeting is a step forward in addressing long-standing issues such as a French digital tax and aircraft subsidies.

It also added to investor optimism after the United States and China signed an interim trade deal earlier in the week.

“The positive comments surrounding one of the United States’ other trade conflicts – with the EU – it just adds to the overall feeling of relief,” said Connor Campbell, analyst at British financial spread better Spreadex.

Signs of improvement in the Chinese economy following an in-line GDP figure and strong industrial production data also aided risk appetite, with demand in the world’s second-largest economy looking to pick up in 2020.

“In recent months the Chinese authorities have been introducing measures to spur on economic activity, such as loosening lending restrictions, and the tactics appear to be working,” said David Madden, a market analyst at CMC Markets UK in London.

The trade-sensitive miners subindex .SXPP rose 2%, marking its best day since early December with BHP Group (BHPB.L), the world’s largest miner and a major Chinese supplier, adding 2.3%.

Stocks in Germany .GDAXI, the EU’s largest economy, rose 0.7%, with technology stocks serving as the biggest boost. Germany, which has a largely export-reliant economy, stands to gain substantially from easing trade tensions.

Pharmaceuticals maker Bayer AG (BAYGn.DE) rose 0.7% after a mediator said the company was close to settling more than 75,000 claims related to its Roundup herbicide.

France’s EDF (EDF.PA) jumped 9.8% to the top of STOXX 600 after the government planned to introduce a “price corridor” for the wholesale nuclear power market that will help the state-controlled utility cover its costs while shielding consumers from price spikes.

Polish videogame developer CD Projekt (CDR.WA) was the biggest loser on the STOXX 600, dropping 5.6% after it postponed the release of its widely awaited game Cyberpunk 2077.

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