European shares are higher Monday, as investor sentiment is buoyed by news the US and Canada reached a fresh trade agreement to replace the previous NAFTA deal. Volkswagen and Linde shares are both higher, helping support that broader upward momentum.
By 1155 BST, the EUROSTOXX 600 was 0.32% higher, while the EUROSTOXX 50 rose 0.53%. Regional bourses also began the fourth quarter on the front foot. The German DAX was up 0.63%, the French CAC was 0.30% in the green and the Spanish IBEX moved 0.71% into positive territory.
US-Canada trade deal
Investors entered the first day of October with a positive tone, as the US and Canada have finally agreed a new trade deal, to replace the previous NAFTA agreement.
“Late last night, our deadline, we reached a wonderful new Trade Deal with Canada, to be added into the deal already reached with Mexico,” US President, Donald Trump tweeted.
“The new name will be The United States Mexico Canada Agreement, or USMCA. It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the US and will bring all three Great Nations together in competition with the rest of the world. The USMCA is a historic transaction!,” Trump said.
Against that upbeat backdrop, there was a good selection of stock gains across European indices.
Among them were Volkswagen shares which gained support from the trade news and also from Friday’s announcement that it had agreed a strategic partnership with Microsoft Azure to support its in-car IoT services.
Volkswagen shares rose 1.07% to hit €153.22.
Linde shares are also higher, rising 1.52% to €180.75, after China’s regulators signed of the Linde-Praxair merger. The deal still requires approval from the US, the EU and south Korea.
Meanwhile, Ryanair shares slumped 9.07% to trade at €11.93 after issuing a profit warning. The budget airline said its full-year 2018/19 guidance is lower amid uncertainty following industrial strike action and also higher oil prices.