Trade progress, Powell boost European stocks; Tesla Germany share falls

LONDON:European shares climbed on Monday after a market-friendly speech by US Fed Chairman Powell and signs of progress on a US-Mexico NAFTA trade deal, which boosted car stocks.

A notable laggard was the Germany-listed stock of US electric carmaker Tesla, which fell more than 3 per cent in early deals on the Tradegate exchange, after Chief Executive Elon Musk called off his bid to take the company private.

The pan-European STOXX 600 rose 0.2 per cent by 0725 GMT, with Germany's DAX up 0.4 per cent, following stronger Asian trading after Powell kept to the Fed's forecast for "gradual" interest rate hikes.

British markets were closed for a public holiday.

Traditional auto stocks were the best performers, up 0.7 per cent after President Donald Trump said on Saturday that a trade deal with Mexico was near.

Jesus Seade, who will serve as chief negotiator for Mexico's next government, said the issue of auto sector rules is "basically resolved" in discussions with US Trade Representative Robert Lighthizer.

BMW, Volkswagen, and Daimler rose 1 to 1.4 per cent. The German carmakers rely on smooth trade between Mexico and the US to sell vehicles made in Mexican manufacturing plants into the US market.

Metro shares surged 17 per cent after Ceconomy announced it may join family-owned Haniel in selling a stake in the German retailer to an investor group led by Czech billionaire Daniel Kretinsky.

Lundin Petroleum shares climbed 4.1 per cent after Norway's Equinor increased its resource estimate for the Johan Sverdrup oilfield, in which Lundin has a 22.6 per cent stake.

Equinor, which has a 40 per cent stake in the field, gained 0.9 per cent.