EU shares helped by optimism around tariffs, dollar perks up

European shares rose on Tuesday, taking their cue from a strong overnight rally on Wall Street on hopes of narrower-than-feared US tariffs, while the dollar continued its cautious rebound, trading near three-week highs against a basket of peers.

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Europe's broad Stoxx 600 share index wasup 0.68 in early trading with most national bench-marks and sectors cautiouslyin positive territory.

Investors’ primary focus was the impending reciprocal tariffs promised by US President Donald Trump and while Trump said on Monday automobile tariffs were coming soon, he indicated that not all of his threatened levies would be imposed on April 2andsome countries may get breaks.

That led to an exuberant “tisk-on” reaction in US markets and the S&P 500 closed at its highest in more than two weeks, while a rally in tech stocks led Nasdaq up more than 22.

SAP 500 share futures were steady in European trade on Tuesday. But investors remain on edge before the April 2 deadline.

“Headline risks (are) the global investors’ daily lot," said Benoit Anne, senior managing director at MFS Investment Management's strategy and insights group.

“Only Covid caused more concern over policy uncertainty at the global level. We are currently facing numerous sources of risks, with the risk of trade war escalation standing out as the key item to watch.”