Europe midday: Shares touch intra-day high on US-China deal hopes

(Sharecast News) - European shares hit record highs on Monday on hopes the US and China would secure a trade deal. The pan-regional Stoxx 600 index was up 0.07% in early deals, reaching 577.26, before settling back to 576.90 at 1212 GMT.

US officials expect Beijing to postpone export controls on rare earths, following trade talks in Malaysia over the weekend. Treasury secretary Scott Bessent said on Sunday US and Chinese officials had drawn up a "very substantial framework" for a trade deal.

"Global markets are kicking off the week in upbeat fashion as geopolitics takes centre stage, with trade optimism giving investors something to cheer about," said Hargreaves Lansdown analyst Matt Britzman.

On the economics front, German business sentiment improved in October, according to a survey released on Monday by the Ifo Institute.

The business climate index rose to 88.4 from 87.7 in September. The expectations index increased to 91.6 in October from 89.8 the month before, while the current situation index dipped to 85.3 from 85.7.

Ifo Institute president Clemens Fuest said: "Companies remain hopeful that the economy will pick up in the coming year."

The manufacturing index improved to -11.7 from -13.2 in September, while the service sector gauge rose to -0.1 from -3.0. The index for trade came in at -21.5 in October versus -23.0 the month before, while the index for construction printed at -15.0, compared to -14.8.

In equity news, HSBC shares fell as the bank announced it would take a $1.1bn impairment charge in its third-quarter results after losing an appeal in a long-running lawsuit in Luxembourg related to Bernard Madoff's multibillion-dollar Ponzi scheme.

Reporting by Frank Prenesti for Sharecast.com