By Sukriti Gupta and Medha Singh
(Reuters) -European shares rose from 14-month lows on Tuesday after four straight sessions of heavy selling, although investors’ mood remained sensitive to tariff-related developments.
The pan-European STOXX 600 was up 1.1% by 0748 GMT, after shedding 12.1% in just the past four sessions as investors worried about a possible global recession triggered by the recent escalation in the trade war.
As of Monday’s close, the index declined 17.9% from its all-time high hit on March 3.
Germany’s benchmark rose 1.1% after the index stopped short of confirming a bear market in the previous session.
Investors piled into defence shares, the best performing sector this year, lifting the index 3.3%. Meanwhile, shares of lenders, which had been knocked down by slowing growth worries, rose 1%.
Dutch chip equipment maker ASML and German engineering company Siemens gained 3.9% and 3.6%, respectively, and were among the biggest supports for the STOXX.
“For the time being, this is more likely to be a temporary bounce rather than any full-fledged recovery, just because the fundamentals which caused the sell off haven’t actually changed as of yet,” said Fiona Cincotta, senior market analyst at City Index.
China refused to bow to what it called “blackmail” from the United States as a global trade war ignited by President Donald Trump’s sweeping tariffs showed little sign of abating.
The European Commission proposed counter-tariffs of 25% on a range of U.S. goods on Monday as the 27-member bloc struggles with tariffs on autos and metals already in place, and faces a 20% tariff on other products on Wednesday.
European Union finance ministers will discuss how to tackle the expected blow to Europe’s economic growth from U.S. levies later this week.
Investors and political leaders have struggled to determine whether Trump’s tariffs are permanent or a pressure tactic to win concessions from other countries.
Wall Street ended a volatile session little changed on Monday on headline whiplash as an erroneous report on a temporary pause on U.S. tariffs briefly caused a 5.6% surge on the S&P 500, underscoring investors sensitivity to trade-related news.
In company news, German chipmaker Infineon Technologies fell 0.9% after saying it would buy Marvell Technology’s automotive ethernet business for about $2.5 billion in cash, to expand its microcontroller segment.
(Reporting by Sukriti Gupta and Medha Singh; Editing by Varun H K)
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