By Sruthi Shankar and Piotr Lipinski
(Reuters) – European shares bounced back on Tuesday from their sharpest decline in two months in the previous session, boosted by technology stocks, but gains were capped as investors grappled with prospects of fresh global trade disputes.
Trade-sensitive German shares <.GDAXI> climbed 0.8%, with help from tech heavyweight SAP
Paris-listed stocks <.FCHI> rose only marginally after the U.S. government said on Monday it may impose punitive duties of up to 100% on $2.4 billion in imports from France, including Champagne, handbags and cheese, after concluding that France’s new digital services tax would harm U.S. tech companies.
Shares in luxury stocks LVMH
“We knew that the U.S. was never going to be happy with France applying a digital services tax,” said Craig Erlam, a senior market analyst at Oanda.
“The timing of these things is always a surprise and maybe the fact he set it to a 100% is potentially higher than people were anticipating.”
That followed the World Trade Organization rejecting European Union claims that it no longer provides subsidies to planemaker Airbus
The broader European stocks index <.STOXX>, however, rose 0.4%, recovering from their worst selloff since Oct 2. on Monday, following U.S. President Donald Trump’s move to restore tariffs on metal imports from Brazil and Argentina.
A set of weak U.S. manufacturing numbers also added to the gloom on Monday, wiping out gains for December in what could have been the STOXX 600 index’s fourth monthly gain in a row.
London’s FTSE <.FTSE> slipped 0.5%, falling for the fourth straight session as miners, and oil and gas companies took a toll from Trump’s latest tariff threats.
Among the bright spots, Italy’s biggest bank UniCredit
Shares in Italy’s utility company Enel
(Reporting by Sruthi Shankar and Piotr Lipinski in Bengaluru; editing by Uttaresh.V and Rashmi Aich)