European stock markets started the final trading session of the week on a strong footing, with major indices firmly in positive territory.
This wave of optimism was largely fueled by comments from the White House on Thursday, which suggested potential flexibility regarding looming tariff deadlines, helping to soothe investor concerns about a potential re-escalation of global trade tensions.
About 10 minutes into Friday’s trading session, the pan-European Stoxx 600 index was trading up by 0.6%, with most sectors edging higher.
The positive sentiment was particularly pronounced in sectors that are most sensitive to international trade dynamics.
The autos and mining sectors led the gains, jumping 1.4% and 1.1%, respectively.
In a classic risk-on move, utilities stocks, which are often used as a hedge against market turbulence, were down by a slight 0.1% in early trade.
The catalyst for this market cheer was a statement from White House Press Secretary Karoline Leavitt on Thursday.
She indicated that President Donald Trump could extend the looming deadlines for reimposing steep tariffs on imports from most of the world’s countries. Leavitt told reporters that President Trump’s July 8 and 9 deadlines for restarting tariffs on these nations are “not critical.”
“Perhaps it could be extended, but that’s a decision for the president to make,” Leavitt said.
She also added that if any of these countries refuse to make a trade deal with the United States by the deadlines, “The president can simply provide these countries with a deal.”
These comments were interpreted by markets as a sign of potential de-escalation, especially after President Trump had threatened in late May to impose tariffs of 50% on imports from European Union nations, all of whom had already been subject to the reciprocal tariffs imposed in April.
Auto sector rallies on trade hopes
European auto stocks were among the biggest beneficiaries of this shift in tone.
The Stoxx Europe Automobiles and Parts index, which has shown significant sensitivity to US trade policy announcements this year, was last seen trading around 1.5% higher.
Top movers in the sector included Porsche and French vehicle parts supplier Valeo, both of which were up 2.2%. Stellantis also gained 2%, while shares of Mercedes-Benz jumped 1.6%.
The rally in auto stocks was also supported by news from Beijing, which said it had agreed with Washington on the details of a trade agreement that had been negotiated in London earlier this month.
Mediobanca pledges payout, fends off hostile bid
In the corporate world, Italian lender Mediobanca was in the spotlight on Friday.
The bank pledged to return 4.9 billion euros ($5.7 billion) to its shareholders over the next three years.
This move is part of its ongoing efforts to push back against a hostile takeover bid from its domestic rival, Monte dei Paschi di Siena (MPS).
In a strongly worded statement, Mediobanca asserted that the proposed offer from MPS “lacks an industrial and financial rationale for Mediobanca shareholders and carries clear and significant execution risks.”
The bank further argued, “The combined entity would have the profile of a medium-sized undifferentiated commercial bank, with high capital absorption, highly sensitive to the macroeconomic environment, without strengthening any of Mediobanca’s business segments and with the risks inherent in MPS’s financial statements remaining unchanged.”
This pledge of a significant capital return appears to be a key part of Mediobanca’s defense strategy, aiming to win shareholder loyalty and fend off the unsolicited bid.
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