Source: Sharecast
"Stocks across the continent have gained as the size of the remarkable package becomes clear. There are clear signs of decoupling between the two areas – tariffs on China, Canada and Mexico have little immediate read-across, though of course the EU is not expected to escape unscathed from Trump’s ire," said IG chief market analyst Chris Beauchamp.
"But with other European countries likely to follow suit investors are quite happy to keep piling to Europe."
The pan-regional Stoxx 600 index was up 0.91% at 556.09.
The day before the pan-regional index had recorded its worst session since August 2024, as US President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect.
Germany's Dax meanwhile jumped 3.38% to 23,081.03 and France's Cac-40 was ahead by 1.56% to 8,173.75.
Sentiment was also lifted by news that Ukraine was ready to sign a minerals deal with the US, signalling potential moves towards a ceasefire in the war with Russia.
Germany’s CDU/CSU alliance and their likely coalition the SPD said they would try to loosen constitutional rules on increasing debt to allow for higher defence spending.
They proposed three major changes to the debt brake - which limits new borrowing to 0.35% of GDP. First, a €500bn special purpose vehicle for infrastructure investment, of which €100bn will be allocated to the federal states; a reform of the debt brake to exempt any defence spending over and above 1% of GDP and reform of the brake at state level to raise their net borrowing cap from to 0.35% of GDP from zero currently.
The news saw yields on German, Italian and Spanish 10-year bonds all jump by around 30 basis points, to 2.791% in the case of Bunds.
In parallel, Brent crude futures slipped a tad below the $70 per barrel mark on the ICE, even as the euro surged to 1.0801 against the Greenback.
Shares in German firms dominated the main risers on the Stoxx. Construction firm Hochtief was up 15%, with manufacturer Kion Group 20% higher, chemicals maker Lanxess up more than 14%, IT group Bechtle 19% higher and Heidelberg Materials jumped 18%.
Adidas edged up even after the sport retailer forecast sales growth slowing slightly to up to 10% in 2025.
In economic news, wholesale inflation across the eurozone accelerated to a 22-month high in January, according to data out on Wednesday from Eurostat, with price pressures picking up across most major categories.
The producer price index for the single-currency region rose by 0.8% over the month, marking the fourth straight month of industrial price increases. This was above the 0.5% growth seen in December and the consensus forecast of 0.5%.
Meanwhile, the final reading of a HCOB/S&P Global private-sector eurozone survey was unchanged from the initial estimate released two weeks ago, showing that growth across the region held steady in February.
The composite purchasing managers' index remained at 50.2 for the second straight month, representing relatively subdued growth (just 0.2 percentage points above the stagnant level of 50.0) as an expansion in the services sector was "almost fully eaten up by the recession in the manufacturing sector", according to Cyrus de la Rubia, chief economist at HCOB.
