By Sanchayaita Roy and Sukriti Gupta
(Reuters) -European shares rose on Wednesday, led by banks, as investors awaited signs of progress on a trade accord with the United States.
The pan-European STOXX 600 index was up 0.5% at 548.28 points, as of 0832 GMT. Other major regional indexes also traded higher.
European Commission President Ursula von der Leyen said on Wednesday that the European Union is working closely with the Trump administration to reach a trade deal, but Brussels is preparing for all scenarios.
Trump said on Tuesday that he is probably two days off from sending the EU a letter disclosing the tariff rate on their exports to the U.S.
He also said that the bloc had been treating the U.S. very nicely in recent trade talks.
“Even though a letter could be sent…the hope of the market and the sign of the negotiations is that there is a willingness to find some common ground,” said Georgios Leontaris, chief investment officer for EMEA at HSBC Global Private Banking and Premier Wealth.
“That said, we don’t know exactly the terms that will be agreed. Therefore, we need to wait and see how the negotiations will play out in the coming days”.
The Financial Times reported on Wednesday that EU negotiators are nearing a trade deal with Trump that would cement higher tariffs than those granted to the UK.
With the deadline for deals extended to August 1 from July 9, investors remain hopeful for more flexibility and negotiations on the table. However, Trump declared there would be “no more extensions.”
Trump also announced plans to impose a 50% tariff on imported copper and said long-threatened levies on semiconductors and pharmaceuticals would be introduced soon.
He threatened a 200% levy on drug imports, which he said could be delayed by about a year.
Shares in some European pharmaceutical companies fell, including Zealand Pharma falling 2% and Novo Nordisk losing 1.7%.
European defence stocks hit a record high and were last up 1.1%. Banks gained 1.2%.
Renk rose 5.7%, among the top gainers in the STOXX 600, after Bloomberg News reported that the German gearbox maker was considering options for its civilian industrial business.
Indra gained 3.1% after Goldman Sachs upgraded its rating on the Spanish defence company to “buy” from “neutral”.
Shares of EssilorLuxottica rose 5.5% on reports that Meta Platforms has acquired a nearly 3% stake in the eyewear maker.
Conversely, WPP fell over 17.2%, hitting a 16-year low after the British ad group slashed its profit outlook.
(Reporting by Sukriti Gupta and Sanchayaita Roy in Bengaluru; Editing by Sherry Jacob-Phillips and Tasim Zahid)
