By Twesha Dikshit
(Reuters) -European equities edged higher on Tuesday, lifted by gains in EssilorLuxottica amid a slew of corporate results, even as markets assessed the fallout from the newly inked trade deal between Washington and Brussels.
The pan-European STOXX 600 index gained 0.5% by 0815 GMT. Most regional bourses also traded higher, with Germany's DAX and France's CAC adding almost 1% each.
The benchmark STOXX 600 rose 0.9% to hit a four-month high early in Monday's session but reversed course
to close about 0.2% lower, as investors weighed the impact of a new 15% levy on most European Union goods, which is significantly higher than pre-2025 levels.
"The dust is still settling on the way the market's looking at this trade deal and its assessment. I think the initial reaction was mainly a bit of a sigh of relief," said Andrea Cicione, head of strategy and head of research at TS Lombard.
"At the end of the day tariffs are bad. Before we had 2.5%, now it's 15% but between 10% and 15% there isn't a huge deal. When the market comes to realise that it will start taking this agreement as a decent compromise."
Ahead of the August 1 tariff deadline, U.S. President Donald Trump said a blanket 15% to 20% "world tariff" rate would be extended toward trading partners who do not negotiate separate trade deals with the U.S.
U.S. -China trade talks were in focus after officials from both sides met on Monday to resolve economic disputes, while seeking to extend the previous tariff truce by three months.
Aerospace and defence stocks added 1.9% after three straight days of losses. The new framework trade deal offered zero-for-zero tariffs on aircraft and parts. Airbus
Among individual stocks, Franco-Italian eyewear group EssilorLuxottica shares jumped 6% after the company reported an increase in first-half operating profit despite a tariff hit.
Dutch company Philips rose 10.3% to the top of the index after the healthcare technology group lowered its tariff impact estimates following the U.S.-EU trade deal.
On the flipside, car distributor Inchcape dropped 7.7% and ranked as the top decliner after posting a first-half profit drop due to tariff impact.
In a week packed with high-stakes economic events, investors will get their first glimpse of second-quarter GDP data from both the euro area and the U.S. on Wednesday, ahead of the Federal Reserve’s rate decision and the closely watched U.S. jobs report on Friday.
(Reporting by Twesha Dikshit and Medha Singh; Editing by Eileen Soreng)
