European Stocks Advance as Traders Assess Trump Measures

European stocks were modestly higher on Tuesday morning, rebounding slightly from Monday's losses, as markets assessed the first policy decisions made by recently inaugurated US President Donald Trump, which included a withdrawal from the Trans Pacific Partnership (TPP).

President Trump's decision to abandon TPP, seen as former President Obama's signature trade deal, comes amid speculation that he may also attempt to renegotiate the North American Free Trade Agreement (NAFTA).

"The narrow one dimensional focus of the new US President's comments, as well as his first executive actions in looking to renegotiate NAFTA and pull out of the Trans Pacific Partnership (TPP) has raised concerns that he is placing greater importance on protectionist measures than his pledges to implement tax cuts and infrastructure spending," Michael Hewson, chief market analyst at CMC Markets in London, said by e-mail.

In equities, travel and leisure and industrial stocks led the declines, while miners, the auto sector and commodities stocks advanced. UK stocks edged higher after the Supreme Court ruled that the government must get Parliament's approval before starting talks about exiting the European Union, according to news reports.

BT Group and EasyJet were among the worst performers in the European benchmark STOXX 600 after issuing profit warnings. BT declined 18% after cutting its adjusted revenue forecasts for 2017 and 2018 citing improper accounting practices at its Italian business. Low-cost airline easyJet was down 7.4% after saying that weakness of Sterling is expected to impact easyJet's year on year profit before tax for financial year 2017 by around 105 million pounds ($131 million).

Miners Anglo American and BHP Billiton rose by 6% and 4.4%, respectively, in London. German software giant SAP fell 0.2% even as the company raised its operating profit forecast for 2017 and through 2020 after stronger-than-expected results last year in its cloud business. Deutsche Lufthansa slumped 1.0% in Frankfurt, along with other airlines across Europe. Luxury fashion brand Hugo Boss fell 0.8% and Deutsche Telekom was down 0.3%.

The pan-European STOXX 600 index was 0.29% higher, London's FTSE 100 Index was up by 0.19%, Frankfurt's DAX was up by 0.27% and Paris' CAC-40 was 0.22% higher at the time of writing.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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