(Bloomberg) -- European stocks extended gains after German Chancellor-in-waiting Friedrich Merz reached an agreement with the Greens party on an infrastructure and defense spending package.
The Stoxx Europe 600 Index gained 1.1% at the close in London, with German shares outperforming. Industrial goods and banks were the top sectors, while mining shares were buoyed by news that Chinese officials plan a press conference Monday on measures to boost consumption.
Media stocks fell, with Universal Music Group down as much as 11% after shareholder Pershing Square sold a stake in the company at a discount.
Kering SA shares plunged as much as 14% after the luxury-goods maker disappointed investors with the choice of Demna Gvasalia as the new artistic director for its struggling Gucci brand. BMW AG dropped after the German carmaker forecast that profitability this year will be well below its targets.
European shares have now recorded a second consecutive week of declines as trade tensions with the US increased, paring this year’s regional rally. On Thursday, President Donald Trump threatened 200% levies on wine, champagne and other alcoholic beverages from the European Union.
In the US, the S&P 500 has plunged 10% into correction territory since a February peak. For Bank of America Corp.’s Michael Hartnett the slump is a technical correction rather than the beginning of a new bear market as it’s likely to prompt policy intervention.
Among other individual stocks, Carlsberg A/S rallied as much as 5% after RBC upgraded the beermaker, flagging its lack of exposure to the US market.
For more on equity markets:
- UK Market Lacks Catalyst to Make It Great Again: Taking Stock
- M&A Watch Europe: BP, UniCredit, Anima, BPM, UMG, EQT, Galderma
- Europe’s Block Trade Appetite Withstands Turbulence: ECM Watch
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--With assistance from Allegra Catelli.
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