European shares inch higher, led by energy, real estate stocks; US tariffs eyed

European shares edged up on Monday, supported by energy and real estate stocks, while markets weighed the possible impact of US President Donald Trump’s warning of tariffs on all steel and aluminium imports into the United States.

The pan-European STOXX 600 index was up 0.2% as of 0955 GMT.

Oil and gas index sector advanced 0.8%, led by a 6.4% jump in BP after a report said activist investor Elliott Investment Management built a stake in the company.

The stock also boosted Britain’s blue-chip index FTSE 100 which was up 0.4% to near a record high. Interest rate sensitive real estate shares jumped over 1%, while telecom stocks added 0.8%.

ASML Holding added 1.3%, helping lift the technology sub-index by 0.5%.

Market focus is now on Trump, who on Sunday said he would announce new 25% tariffs on all steel and aluminium imports, along with other reciprocal tariffs on all countries this week. Basic resources fell 0.3% on Trump’s pledge to impose tariffs on steel and aluminium imports.

Steel and iron ore manufacturer ArcelorMittal fell 2.4%. European steelmakers account for about 15% of imports into the United States.

German Chancellor Olaf Scholz said in a pre-election debate that Europe was prepared to respond “within an hour” if the US imposes trade levies against the European Union.

European shares near record high following robust earnings; BoE rate decision awaited

The STOXX 600 logged its seventh straight weekly advance on Friday as investors shrugged off trade war-related worries to focus on robust quarterly results.

“I think they (tariff threats) are losing their shock value. Investors are learning that Donald Trump’s announcements don’t necessarily mean that he will follow through,” said Danni Hewson, head of financial analysis at AJ Bell.

The European Central Bank’s Vice-President Luis De Guindos said Europeans need to have a prudent and intelligent approach towards trade tariffs as initial announcements at times “don’t end up materialising”.

The ECB said on Friday it may still be several interest rate cuts away from the “neutral” level which neither stimulates nor restricts economic growth, which it now sees between 1.75% and 2.25%.

Among other stocks, GTT Group fell 3.9% to the bottom of STOXX 600 after the French engineering company’s CEO Jean-Baptiste Choimet resigned.