LONDON — European stocks opened higher on Monday, reversing some of last week’s losses, as investor focus centered on a fresh trade spat brewing between the United States and China. The rally was decisively led by a sharp rebound in mining shares, which had been hit hard in the preceding session.
The pan-European Stoxx 600 index climbed 0.6% in early London trading, with the Stoxx 600 Basic Materials Index surging 1.6% after falling 2.5% on Friday. Major national indexes also posted gains: the U.K.’s FTSE index was up 0.1%, Germany’s DAX rose 0.5%, France’s CAC 40 added 0.6%, and Italy’s FTSE MIBgained 0.5%.
Trade Spat Fuels Mining Stocks
Mining companies were key drivers of the early advance. Fresnillo stock soared 5.7%, Aurubis rose 3.9%, and Anglo American added 2.5%. The market reaction followed U.S. President Donald Trump’s threat of a fresh wave of tariff increases to “financially counter” new export controls that China imposed on rare earth minerals.
China is a dominant player in the global supply chain, controlling about 70% of the world’s rare earth minerals, which are vital components for high-tech industries including electric vehicles, defense systems, and semiconductors.
However, the trade tensions showed signs of de-escalation after President Trump posted on Truth Social on Sunday, suggesting trade relations with China “will all be fine,” easing market fears that had dragged down global stocks on Friday. Meanwhile, China’s Ministry of Commerce stated on Sunday that it was “not afraid of” a trade war.
Corporate News: Lloyds and AstraZeneca in Focus
In corporate news, U.K. banking giant Lloyds Bank rose 1.1% after announcing it was setting aside an additional £800 million (approximately $1.07 billion) to cover potential compensation claims arising from the ongoing car finance misselling scandal. The new provision increases the bank’s total earmarked funds for redress payments to nearly £2 billion, stemming from its subsidiary Black Horse, the U.K.’s largest auto finance provider.
The broader European autos sector gained 0.9%. This was despite some major carmakers facing legal action in the London High Court over allegations of attempting to cheat diesel emissions limits. Stellantis climbed 2.5%, Renault added 1.3%, and Mercedes-Benz was up 0.3%.
Elsewhere, AstraZeneca shares advanced 0.9% after the British drugmaker reached a pricing deal with the U.S. government late Friday. The deal, which includes reducing prices for the U.S. Medicaid program in exchange for avoiding threatened tariffs, followed a similar agreement struck with Pfizer.
Political and Economic Calendar
On the political front, newly reappointed French Prime Minister Sebastien Lecornu unveiled his government, with Roland Lescure named finance minister. The government is expected to present a new budget plan later today ahead of President Emmanuel Macron’s deadline.
While the day is quiet for major earnings or data releases, investors are preparing for the start of the third-quarter earnings season this week, with financial reports expected from companies including ASML, LVMH, and Nestle. Market watchers will also be tracking developments from the IMF and World Bank annual meeting in Washington.
The positive European open contrasts with overnight trading in Asia-Pacific markets, which mostly fell as investors assessed the renewed uncertainty from the China-U.S. trade dispute. U.S. stock futures, however, pointed to a rebound following President Trump’s attempt to reassure markets.
