European stock markets rise slightly, trade easing boosts confidence, but market caution remains

According to European reports, on Tuesday, May 13th, European stock markets closed slightly higher, continuing their fourth consecutive trading day of gains. The pan European STOXX 600 index closed up 0.1%, close to its highest level since the end of March. This round of rebound is mainly due to the global market generally rising on Monday, especially the news of China and the United States announcing a 90 day suspension of new tariffs, which eased market concerns about a global economic recession.

Although the US Consumer Price Index (CPI) data for April showed lower than expected inflation, the data has not yet reflected the impact of the Trump administration's new tariff policies, and investors remain cautious about the future trend of inflation. Danni Hewson, head of financial analysis at AJ Bell, pointed out that "the current market performance may not necessarily represent the trend in the coming months, and investors still hold a cautious attitude towards this inflation report

The easing of trade frictions between China and the United States brings temporary benefits, but long-term risks still exist. Although both sides agreed to suspend most of the newly added tariffs since April for 90 days, the market was initially optimistic. However, analysts emphasized that the current tariff level is still higher than at the beginning of the year, and the suspension measures have not completely eliminated tariffs. Hewson added, "After a brief period of optimism subsided, investors began to re-examine the details and realized that tariffs have not yet been lifted

Market volatility has eased, with the Euro STOXX volatility index dropping to an 11 week low, indicating that short-term market confidence remains robust.

The performance of corporate financial reports shows significant differentiation. German pharmaceutical giant Bayer's adjusted profit for the first quarter decreased, but exceeded market expectations, with its stock price rising by 2.8%. In contrast, the two major reinsurance companies in Germany, Munich Reinsurance and Hanover Reinsurance, fell 4.6% and 4.4% respectively, mainly due to the impact of the Los Angeles wildfire causing up to 1.7 billion euros in claims, dragging down the overall performance of the insurance sector. The insurance industry index fell by 1.2%.

According to the latest LSEG IBES data, the expected profit growth rate for European companies in the first quarter has been raised to 1.9%, a significant increase from 0.4% a week ago.

The green energy sector has performed outstandingly, leading the market up. Danish wind energy company Vestas surged 9.2%, becoming the largest rising stock in STOXX 600. Market analysis suggests that the proposed revocation of some climate incentive policies by US lawmakers has limited impact and supports a rebound in the green energy sector. EDP Renovateis, a Portuguese energy company, rose 7.5%, while Acciona Energia, a Spanish renewable energy company, rose 5.4%.

Overall, despite the short-term boost brought by trade easing and inflation data, European stock markets still face uncertainty, and investors continue to remain cautious, paying attention to subsequent economic data and policy trends.