European shares are recovering from a two-month low
European shares rebounded in early trade on Tuesday after hitting a two-month low the day before, with comments from Washington and Beijing overnight helping to calm investors' fears of a worsening trade dispute.
By 0736 GMT, the Stoxx 600 European index rose 0.6% after it had fallen 1.2% on Monday after both the United States and China announced a new round of tariffs on each other's imports.
Germany's DAX, which is heavily affected by trade, also rose 0.5%, while the European auto sector, which is heavily dependent on exports and one of the hardest-hit sectors, climbed 1.4% yesterday, driving regional gains.
US President Donald Trump said yesterday he was optimistic about a settlement of the trade dispute, while a Chinese diplomat also expressed confidence in a possible deal.
Traders said Trump's comments boosted appetite for riskier assets such as equities, although caution remained high after Beijing retaliated by imposing tariffs on US goods, exacerbating tensions between the world's two largest economies.
The Stoxx 600 index has been down more than 4% since the beginning of the month, heading for its biggest one-month decline since heavy selling in December.
The banking sector index rose 0.7%, and the sector was hit on the back of new concerns about the economy due to renewed trade tension unexpectedly between the two largest economies in the world.
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