Europe close: Shares bounce despite uncertainty in UK, France, Spain
Shares on the Continent finished higher on Tuesday thanks to positive news around the US-China trade talks and somewhat more positive economic headlines locally.
Overnight, officials from Washington and Beijing reportedly kicked-off trade talks, with Bloomberg reporting towards noon that China was moving to reduce the tariffs which it had recently levied on imports of US cars.
Nevertheless, traders were also keeping close tabs on reports that Prime Minister Theresa May might be about to face a no-confidence vote and adding up the cost of the tax cuts promised by French President, Emmanuel Macron, in a bid to quell the recent uproar over his proposed fuel tax hikes.
But the recent sharp drop in stockmarkets globally meant traders remained quite cautious, with Chris Beauchamp at IG telling clients: "After slumping to two-year lows, some rebound was to be expected, but it is still far from clear whether there is sufficient momentum behind this one, when recent recoveries have proven to be short-lived."
Against that backdrop, by the end of trading, the benchmark Stoxx 600 was ahead by 1.53% or 5.19 points to 344.18, alongside a 1.49% or 158.44 point advance for the German Dax to 10,780.51, while the FTSE Mibtel was up by 0.98% or 180.88 points to 18,591.01.
Pacing gains at the sector level, the Stoxx 600's gauge for Basic Resources jumped 3.11% to 389.09, alongside an advance of 2.34% in a separate sub-index for Autos&Parts to 451.80.
Spain's Ibex 35 was higher too, adding 0.87% or 75.50 points to 8,735.50, despite the ongoing political tensions in Catalonia after the regional president reportedly backed acts of civil disobedience, calling on the local police not to act in response, and having at one point moved to purge some of the top ranks of the police.
On a more positive note, according to Italian daily La Repubblica, finance minister Giovanni Tria was trying to convince the government in Rome to lower its target for the country's budget deficit in 2019 to 2.0% as a proportion of GDP, versus the 2.4% goal initially tabled.
Brussels meanwhile was reportedly ready to accept a deficit goal of 1.95% of GDP.
In economic news, INSEE reported that French non-farm employment rose at a quarter-on-quarter pace of just 0.1% over the three months to September (consensus: 0.2%), although Oxford Economics said the figures were being depressed by the end of subsidies for public sector hiring.
As an aside, the consultancy estimated that Macron's largesse could boost France's public deficit to the equivalent of 3.5% of GDP in the absence offsetting measures, versus a targeted level of 2.8%.
Next door, in Germany, the ZEW institute's economic confidence gauge for December improved to a reading of -17.5 after a print of -24.1 for the month before, possibly heralding a rebound in growth over the fourth quarter of 2018 and the first three months of 2019.
Shares of Spanish grocer Dia reeled on the heels of a report that the firm had asked its lenders to take a haircut on their loans, which came just a day after the country's market regulator announced that the company would stop being listed on the top-flight Ibex 35 index.
Dia denied that report, saying that it was only in talks with its lenders in order to refinance its debt.
On the other side of the ledger, stock in oil major Repsol reversed early gains on the back of ratings agency Moody's decision to lift its rating on the company's long-term debt, as crude oil futures trimmed an early advance.