UPDATE 2-China tariff delays pull European shares out of doldrums

  • Reuters
  • Stock Market News
UPDATE 2-China tariff delays pull European shares out of doldrums
Credit: © Reuters.

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* Washington delays 10% tariffs beyond September

* Italian shares rebound as banks rise

* Henkel cuts outlook, shares slump (Recasts throughout, updates to close)

By Susan Mathew and Shreyashi Sanyal

Aug 13 (Reuters) - European shares staged a comeback from early losses on Tuesday as growth sectors led the charge, after Washington's move to delay tariffs on some Chinese goods provided a lift to battered global sentiment.

The U.S. administration will delay imposing a 10% tariff on certain Chinese products, including laptops and cell phones, beyond September, the Office of the U.S. Trade Representative said on Tuesday. A separate list also included some imports that would be exempted altogether from tariffs. supported a move back to riskier assets after a cocktail of negative drivers had pressured markets for the past few sessions.

Commodity stocks .SXPP , automakers .SXAP and tech sectors .SX8P were among the biggest gainers in Europe, and helped the pan-European STOXX 600 index close up 0.5%, erasing session losses of up to about 0.8%.

"What we are seeing now with this announcement is a clear positive development," said Ken Odeluga, market analyst at City Index. "This definitely counts as a relief to markets because... this announcement shows the willingness to compromise from both sides."

But Odeluga doubts the longevity of Tuesday's rally given recent volatility in markets spurred by recession fears, worsening Hong Kong tensions and a crash in Argentine markets.

Export-reliant Germany's DAX .GDAXI rose 0.6% on the U.S. news, recovering after data showed plunging economic sentiment among German investors. Investors will be closely watching Wednesday's second-quarter economic growth data to see if Europe's biggest economy is headed for recession. easing in trade tensions also lifted oil prices which saw energy stocks being among the top gainers on STOXX 600. O/R

Italian shares .FTMIB , troubled by political turmoil, rose more than 1% as banks .FTIT8300 rose with Monte Dei Paschi BMPS.MI up 7.2%.

Right-wing League leader Matteo Salvini's drive for early elections in Italy hit a road bump on Monday with parliamentary party leaders failing to decide when the Senate should debate his no-confidence motion in the government. think we're going towards a technical government... that brings Italy to elections in an orderly fashion, securing public finances, which can help reduce the damage," said Carlo Franchini, head of institutional clients at Banca Ifigest.

In corporate news Henkel HNKG_p.DE shares slid to the bottom of the pan-region index after the German consumer goods company lowered its full-year outlook for sales and earnings.

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