Europe close: Stoxx 600 hits three-week high as US-China tensions ease
By Benjamin Chiou
Date: Wednesday 23 Apr 2025
(Sharecast News) - Easing trade tensions between the US and China, along with stronger-than-expected earnings from Europe's largest listed company, helped stocks across the continent rise strongly on Wednesday.
The Stoxx 600 finished 1.8% higher at 516.77 - its highest close since 3 April - with German software giant SAP among the continent's best performers after beating forecasts with its first-quarter results.
"Global stock indices received a double boost today," said Axel Rudolph, senior technical analyst at IG. "Hopes of a potential de-escalation in the US-China trade war and better-than-expected earnings by the likes of Tesla and Boeing also helped improve sentiment."
Trade tensions between the US and China - which have weighed heavily on markets over recent weeks - eased overnight after America's Treasury Secretary Scott Bessent said there "will be a de-escalation" in the administration's trade war with Beijing. "No one thinks the current status quo is sustainable," he said, adding that, while negotiations had not yet begun, a deal with China was still possible.
Also helping investor sentiment were comments from Trump who reassured markets he has no plans to fire Federal Reserve chair Jerome Powell, only days after calling him a "major loser" for not cutting interest rates. The central banker said last week that the administration's tariff policies posed upside risks to inflation and downside risks to growth.
In economic data, the HCOB eurozone composite purchasing managers' index decreased to 50.1 in April, down from 50.9 in March. This was marginally below market forecasts but the fourth consecutive month above the neutral 50-point mark, which separates growth from contraction.
In contrast, the S&P Global UK composite PMI dropped to 48.2 in April, down from 51.5 in March. This was the first figure under 50 in 18 months and the lowest reading since November 2022, with new export orders dropping at their sharpest rate since May 2020.
Market movers
Shares in SAP surged 11% after the company reported a bigger-than-expected increase in first-quarter earnings, helped by cost-cutting measures. SAP, which last month surpassed Novo Nordisk to become Europe's largest listed company, saw its market cap climb to just shy of €300bn after posting a first-quarter operating profit of €2.46bn, up from €1.53bn a year earlier and ahead of the €2.22bn estimate.
Financial stocks, which had recently been weighed down by weaker economic prospects on the back of escalating trade tensions, were mostly higher, including HSBC, Commerzbank, Deutsche Bank, Societe Generale, Standard Chartered and Barclays.
London-listed specialty chemicals outfit Croda jumping 8% after reporting an 8% increase in first-quarter sales and reiterating its full-year profit forecasts.
Shares in Volvo fell initially but pushed higher by the close despite the Swedish vehicle manufacturer reporting that first-quarter net sales fell 7%, citing Trump's tariff policies. Fellow automaker Saab however finished firmly lower.
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