- BP falls after warning on Q4 profit
- JD Sports Fashion drops on lowering profit forecast
- French PM to speak later in the day
- STOXX up 0.5%
Jan 14 (Reuters) - European shares recouped some losses on Tuesday after falling for two straight sessions following a report that U.S. President-elect Donald Trump might opt to impose gradual tariff hikes, with sectors such as automobiles advancing.
The pan-European STOXX 600 was up 0.5% by 1018 GMT after falling about 1.4% in the last two sessions.
Analysts attributed Tuesday's advance to a Bloomberg report that members of Trump's incoming economic team are discussing slowly ramping up tariffs month by month.
"We've seen a slight easing of those fears, but I wouldn't go as far as saying that the mood has changed completely," said Fiona Cincotta, senior market analyst at City Index.
"It is still very much in its early stages and there is still very much a sense of uncertainty about how aggressively (Trump) will be applying tariffs when he does take the office."
Automobiles and parts, a sector that has been under pressure lately due to the tariff threats, jumped 1.5%.
Additionally, the technology index also advanced 1.2%, while euro zone lenders were up 1.7%.
Also aiding equities, euro zone bond yields edged down slightly from their multi-month highs on the day, with the yield on the 10-year bund last at 2.6%.
Global markets have been on edge lately about the chances of fewer interest rate cuts by the Federal Reserve this year following hot U.S. jobs data and the likelihood that Trump's potential tariffs could add to inflationary pressures.
Meanwhile, French Prime Minister Francois Bayrou is expected to use a speech to lay out the contours of a deal to water down pension reforms in return for support from the left on passing a budget.
France's benchmark index CAC 40 outperformed its peers and jumped 1%.
On the downside, the oil and gas fell 0.6%, with BP losing 2.6% after the energy giant said that lower refining margins would hurt its fourth-quarter profit by $100 million to $300 million.
JD Sports Fashion tumbled 9.5% after the British sportswear retailer downgraded its profit forecast and warned it was "cautious" in the coming year.
British online supermarket and technology group Ocado Group's shares jumped 10.7% as its joint venture with Marks and Spencer's, Ocado Retail, reported faster sales growth in its fourth quarter.
Temenos surged 8.7% to its highest level since April 2024 after the Swiss banking software firm reported better-than-expected fourth-quarter results.
Reporting by Nikhil Sharma; Editing by Eileen Soreng and Tasim Zahid
Source: Reuters