European stocks rose on Tuesday after a “historic” free trade agreement, described as the “mother of all deals,” was struck between India and the European Union.
The agreement represents about 25% of global GDP and nearly a third of world trade.
The pan-European STOXX 600 index rose 0.2% to 611.16 points.
Germany’s DAX index rose 0.1% to 24,979.70 points, Britain’s FTSE index rose about 0.2% to 10,176.03 points, and France’s CAC index was steady at 8,135.52 points.
According to the European Council, the EU's main exports to India include machinery, equipment, transport equipment and chemicals, while India's top exports to the EU are machinery, chemicals and fuels.
The seasonal nature of financial results resumes, with regional investors closely watching the latest reports from companies such as ASML, Volvo, LVMH, and Deutsche Bank this week. Reports from Atlas Copco, Sandvik, and Logitech International are scheduled for release on Tuesday.
Uncertainty in global trade intensified overnight after US President Donald Trump threatened South Korea with increased tariffs on Monday. Speaking on TruthSocial, Trump said the South Korean parliament had not ratified the trade agreement with Washington and that tariffs on Korean cars, pharmaceuticals, and lumber would rise from 15% to 25%. Shares of South Korean automakers fell sharply but later recovered some of their losses.
At the overnight close, S&P 500 futures were near the breakeven line, after the major indexes opened the busy week of earnings with a slight rise. Investors are also awaiting the Federal Reserve's interest rate decision later this week.
The central bank is expected to keep its key interest rate in the range of 3.5% to 3.75%, but investors will be looking for clues about the timing of any possible future cuts.
