European Shares Soar on Trade-War Truce Hopes; Oil Stocks Jump

(Bloomberg) -- European shares followed Asia stocks and jumped at the open after a truce in the U.S.-China trade war. Oil shares soared.

The Stoxx 600 Europe Index rose 1.9 percent. Exporters gained with miners and autos leading the rise. The STOXX 600 Basic Resources Index climbed 6 percent, the most in two years as the oil price was lifted by Saudi Arabia and Russia extending their pact to manage the market. Italian shares rose on a report the country may reconsider its deficit target for next year.

U.S. President Donald Trump and China President Xi Jinping agreed to keep their trade war from escalating with a promise to halt the imposition of new tariffs for 90 days during a meeting at the Group of 20 summit in Argentina over the weekend. Trump said later that China has agreed to “reduce and remove” tariffs on imported American-made cars.

“The market is welcoming that the escalation of the trade tensions has been halted, even if it’s temporary” Alfonso Benito, chief investment officer at Spanish asset manager Dunas Capital, said by phone. “We could see an end-of the year rally in this last month of 2018 on renewed optimism.”

European Shares Soar on Trade-War Truce Hopes; Oil Stocks Jump

Italian newspaper Il Messaggero reported Prime Minister Giuseppe Conte is convincing deputy premiers, Matteo Salvini and Luigi Di Maio, to set 2019 deficit at 1.9 percent to 2 percent, down from the originally planned 2.9 percent.

©2018 Bloomberg L.P.