By Sukriti Gupta
(Reuters) -A rally in technology stocks helped lift European shares on Monday after U.S. President Donald Trump granted exclusions from steep China tariffs on smartphones and computers, providing markets a breather following weeks of sharp fluctuations.
The pan-European STOXX 600 was up 2.1% by 0824 GMT, after registering its third consecutive week in the red on Friday.
Weeks of back-and-forth over tariffs have rattled global markets, dragging the benchmark index down roughly 12% from its record closing high.
All regional indexes were trading higher, with trade-exposed Germany gaining 2.5%, while France, Spain, and the UK were up between 1.8% and 2.1%.
Shares of chip-related companies Infineon, ASML, and BE Semiconductor rose between 3.3% and 4.2% after Trump on Saturday granted exclusions from tariffs on smartphones, computers and some other electronics largely imported from China.
The European technology stocks rose nearly 3%, while economically sensitive banks advanced 3.1%.
“It’s perhaps a sign of the start of the negotiation phase. There’s still more than a little bit of uncertainty around how this will actually play out but investors perhaps see the signs of flexibility,” said Richard Flax, chief investment officer at Moneyfarm.
“It’s very difficult to take any particular announcement from the U.S. administration and really hang your hat on it and say this is where policy will be going forward … investors are unlikely to take any particular comment and ascribe too much significance to it.”
Trump said on Sunday that tariffs on semiconductors would be announced over the next week and a decision on phones would be made “soon”.
Goldman Sachs cut its 12-month price forecast for the benchmark STOXX 600 index to 520 from 570, trimming their forecast for the second time this month due to uncertainty surrounding Trump’s tariff policies.
The European Central Bank is set to hold its policy meeting on Thursday, with markets widely anticipating a 25-basis-point rate cut.
Investors will also pay close attention to policymakers’ assessments of how tariffs are affecting the economic outlook as traders raised bets of rate cuts. Traders expect the deposit rate to hit 1.63% by December, from 1.94% a month ago.
In company news, shares of BNP Paribas climbed 4.1% after the French bank lowered its return on invested capital forecast for its 5.1 billion euro ($5.8 billion) acquisition of AXA’s asset management arm — a cut that was seen as “smaller than feared” by investors.
Shares in Vallourec rose 5.1% after the metallurgical group said it has entered exclusive talks with investment company Aldebaran to sell Serimax.
(Reporting by Medha Singh and Sukriti Gupta; Editing by Sherry Jacob-Phillips)
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