San Francisco Frontiers - European stocks rally with eyes on earnings, trade deal

Investors' attention turned also to the release of key US economic indicators and the Federal Reserve's next policy decision due Wednesday.

US President Donald Trump's agreement with the European Union on Sunday saw tariffs set at 15 percent, down from a threatened 30 percent, which helped ease trade war fears.

The Paris and Frankfurt stock markets jumped around 1.5 percent in early afternoon deals.

London also advanced, boosted by a three-percent rise to the share price of heavyweight AstraZeneca after the drugmaker posted strong earnings.

Market sentiment had been cautious Monday "as the narrative took hold that the EU had failed to secure meaningful concessions from the US", noted Deutsche Bank analyst Jim Reid.

But Tuesday saw "optimism that businesses can now start to operate with greater certainty in Europe", said Joshua Mahony, chief market analyst at Rostro trading group.

The euro, however, remained under pressure against the dollar on concerns about the impact of the trade deal on the eurozone economy.

After a tepid day on Wall Street -- which still saw the S&P and Nasdaq hit records -- Asia markets were mixed.

Tokyo and Hong Kong closed in the red, while Shanghai rose.

Traders kept an eye on US talks with other major economies, including India and South Korea, and negotiations between top US and Chinese officials in Stockholm.

Talks continued on Tuesday, with hopes that Beijing and Washington would extend a 90-day truce on higher tariffs that ends on August 12.

Investors also awaited a busy few days of earnings from tech titans Apple, Microsoft, Meta and Amazon, as well as data on US economic growth and jobs.

That all comes as the Fed concludes its policy meeting amid increasing pressure from Trump to slash rates, even with inflation staying stubbornly high.

While rates are expected to be unchanged Wednesday, markets will scrutinise the Fed's statement for hints on its outlook for the second half of the year.

Oil prices extended Monday's rise after Trump shortened a deadline for Russia to end its war in Ukraine to August 7 or 9, following which he vowed to sanction countries buying its crude.

In company news, shares in Jeep owner Stellantis fell around two percent in Paris after it reported a 1.5-billion-euro ($1.7-billion) hit from US tariffs, even as it flagged a gradual improvement in sales revenues.

Shares in eyewear giant EssilorLuxottica jumped nearly seven percent on strong second quarter results, topping the Paris CAC 40 index.

In London, UK bank Barclays rose one percent after reporting higher second-quarter profits driven by market volatility from US tariffs, while Games Workshop climbed five percent on stronger annual profits.

- Key figures at around 1050 GMT -

London - FTSE 100: UP 0.7 percent at 9,144.03 points

Paris - CAC 40: UP 1.6 percent at 7,921.45

Frankfurt - DAX: UP 1.4 percent at 24,297.24

Tokyo - Nikkei 225: DOWN 0.8 percent at 40,674.55 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 25,524.45 (close)

Shanghai - Composite: UP 0.3 percent at 3,609.71 (close)

New York - Dow: DOWN 0.1 percent at 44,837.56 (close)

Euro/dollar: DOWN at $1.1581 from $1.1597 on Monday

Pound/dollar: UP at $1.3362 from $1.3356

Dollar/yen: UP at 148.53 yen from 148.52 yen

Euro/pound: DOWN at 86.68 pence from 86.80 pence

Brent North Sea Crude: UP 0.4 percent at $69.57 per barrel

West Texas Intermediate: UP 0.3 percent at $66.92 per barrel

P.Thomas--SFF