European stocks opened firmly higher Tuesday, following a solid session in Asia, as investors piled back into equity markets despite concern that U.S. trade tariffs could spark a global trade war and slow economic growth.
Europe's Stoxx 600 index, the region's broadest measure of share prices, gained 0.76% in the opening hour of trading to 373.60 points as benchmarks around the region rebounded from yesterday's declines as investors found solace in both the coalition government agreement in Germany and the likelihood of a dovish message from the European Central Bank's next policy meeting Thursday in Frankfurt.
Germany's DAX performance index gained more than 1.03% thanks to notable rebounds for Volkswagen AG (VLKAY) , the world's biggest carmaker, which gained 3.72% to €161.70. Rival Daimler AG (DMLRY) rose 0.7% to €68.21 while BMW AG (BMWYY) gained 0.89% to €84.69 each.
Britain's FTSE 100 rose 0.92% in London as basic resource and energy stocks rose and the pound continue to underperform against both the dollar and the neighbouring euro amid broader concerns over the country's Brexit strategy.
Smurfit Kappa Group Plc (SMFKY) shares were the region's outstanding gainer, rising more than 18.4% in London trading to £30.10 each after the Irish packaging company said it rejected a takeover bid from U.S.-based International Paper Co. (IP) that "does not reflect the Group's true intrinsic business worth or its prospects" according to the Dublin-based group.
U.S. stocks are also slated to extend gains at the opening bell, following last night's rally on Wall Street that clawed back all of the losses linked to President Donald Trump's suggestion that he's ready to slap a 25% tariff on imported steel and a 10% levy on non-American aluminium. Futures contracts tied to the Dow Jones Industrial Average were marked 65 points higher from their Monday close in early European trading, indicating an opening bell gain of 70 points, while those linked to the broader S&P 500 were seen 5.25 points, or 0.19%, to the upside.
The optimism could be tested, however, by a report from Bloomberg news which suggested the European Union has proposed a retaliatory 25% tariff against U.S. steel imports, blue jeans, t-shirts and Harley Davidson Inc. (HOG) motorcycles that would collectively hit more than €2.8 billion ($3.5 billion) worth of American goods.
Overnight in Asia, however, investor focus returned to the broader global economy, which continues to grow at a near 4% clip, robust corporate earnings and still-tame inflation, all of which were components that drove markets to the all-time highs reached in late January. Japan's Nikkei 225 benchmark rebounded firmly on Tuesday with a 1.6% gain that took the index to a closing level of 21,417.76 points while the broader MSCI Asia ex-Japan index headed towards the close of trading riding a 1.8% gain.
The U.S. dollar index, a measure of the greenback against a basket of six global currencies, was little-chanted at 90.03 even as benchmark U.S. Treasury note yields crept modestly higher to 2.88% in overnight Asia trading.
Global oil prices eased modestly in early European trading as investors trimmed long position following three days of gains and ahead of today's American Petroleum Institute data on U.S. domestic crude stocks.
Brent crude contracts for May delivery, the global benchmark, were seen 10 cents lower from their Monday closing levels in New York at $65.44 per barrel while WTI contracts for April were marked 12 cents lower at $62.55 per barrel.