By Shreyashi Sanyal
(Reuters) – European shares touched their highest level in nearly two years on Monday on hopes that a U.S.-China trade deal could be in the offing, while a strong earnings report by Ryanair lifted Irish stocks to a one-year high.
The pan-European STOXX 600 index <.STOXX> rose 0.5% to its highest since January 2018.
The benchmark index is inching close to a record high hit in April 2015, after ending Friday with its fourth straight weekly gain as upbeat U.S. jobs numbers and a bounce in Chinese manufacturing tempered concerns over slowing economic growth.
U.S. Commerce Secretary Wilbur Ross said on Sunday licenses for U.S. companies to sell components to China’s Huawei Technologies Co will come “very shortly”, adding there was no reason a trade deal could not be on track to be signed this month.
“The question now is how much markets are pricing in a deal between the United States and China and I would say there is a 50% chance that they will get it done,” said Teeuwe Mevissen, senior market economist at Rabobank.
Tariff-exposed European miners <.SXPP> gained 1.9%.
Auto stocks <.SXAP> rose 3%, logging the biggest gain among the market’s main sub-sectors. The rally was also led by reports that Fiat Chrysler
Germany’s BMW
Trade-sensitive Frankfurt shares <.GDAXI> rose 0.8%.
Siemens Healthineers Expectations had been low for third-quarter earnings from European companies, and most firms have surpassed estimates four weeks into the reporting season.
Ryanair Dutch oil and chemicals storage company Vopak Meanwhile, investors shrugged off weak manufacturing data from major European regions, even as the factory activity in the bloc’s powerhouse, Germany, remained in recession in October.
(Reporting by Shreyashi Sanyal in Bengaluru; editing by Patrick Graham and Anil D’Silva)