The easing of trade tensions between the United States and China has propelled Germany's DAX index to a new all-time high.

On Monday, the benchmark DAX surged by as much as 1.8 percent to 23,911.98 points, marking its highest level ever and putting the psychologically important 24,000-point threshold within reach. The EuroStoxx 50 also climbed, gaining just over two percent to around 5,422 points. By midday, both indices were trading one to nearly two percent higher.

The US and China have significantly scaled down their trade war hostilities in recent months. Both sides agreed to a 90-day truce in the dispute as well as substantially lower tariff rates. US Treasury Secretary Scott Bessent told reporters in Geneva on Monday that, following negotiations with China, mutual tariffs would be cut by more than 100 percentage points to ten percent. "It appears Trump will have to pull back from his tough demands and face reality. For the markets, this is positive news for now," said Carsten Brzeski, Chief Economist at Dutch banking giant ING. "Nevertheless, tariff levels remain higher than at the start of the year, and a deal is by no means a done deal. Just because the worst-case scenario is avoided doesn't mean everything is fine."

OIL AND DOLLAR SOAR

The announcement sparked gains across several sectors. Shares of container shipping firms Hapag-Lloyd and Maersk each jumped more than twelve percent. Investors also snapped up shares in luxury goods companies with significant exposure to China, pushing the European sector index up five percent. Chipmakers such as Infineon, ASM International, and STMicroelectronics drove the European technology index 3.4 percent higher. Sportswear manufacturers Puma and Adidas also advanced, rising 5.4 and 3.7 percent, respectively.

Oil markets also moved higher. North Sea Brent crude and US WTI crude each rose by nearly three percent, reaching $65.65 and $62.79 per barrel (159 liters), respectively. The dollar index rebounded as well, gaining almost 1.5 percent to hit 101.655 points--its highest level in a month.

PROSIEBEN SHARES SOAR AFTER PPF BID

Elsewhere, ProSiebenSat.1 shares stole the spotlight with a nearly 20 percent jump. Czech investment group PPF, a major ProSieben shareholder, disrupted Italian company MFE's takeover attempt, declaring its intention to invest up to 300 million euros to double its stake in ProSiebenSat.1 to nearly 30 percent.

By contrast, defense contractors Hensoldt and Rheinmetall saw their shares tumble by almost ten and 4.5 percent, respectively. Ukrainian President Volodymyr Zelensky has agreed to meet Russian President Vladimir Putin for talks in Turkey on Thursday.

Meanwhile, US President Donald Trump's decision to lower prescription drug prices in the US weighed on shares of European pharmaceutical companies, with the sector index falling 3.4 percent.

In Milan, Unicredit made headlines after the Italian banking giant--which is courting Germany's Commerzbank--raised its outlook following a significant profit increase in the first quarter. Unicredit shares climbed nearly four percent in response.

(Reporting by Zuzanna Szymanska, edited by Ralf Banser. For queries, contact our editorial teams at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)