European stocks closed higher on Wednesday, after President Donald Trump said he was upbeat about the chances of securing a trade deal with China. Meanwhile, sterling climbed away from 20-month lows on news that British Prime Minister Theresa May will face a vote of no-confidence from members of her own Conservative party later in the day. The pan-European Stoxx 600 closed provisionally up by 1.69 percent, with all sectors and major bourses in positive territory. Europe's basic resources stocks, with their heavy exposure to China, were the top performers Wednesday afternoon, up 2.84 percent after Trump said he would not raise tariffs on Chinese products until he was sure about a deal. BHP Group, Boliden and Rio Tinto were all traded higher on the news. Looking at individual stocks, shares in Germany's biggest lenders Deutsche Bank and Commerzbank have risen 5.81 percent and 5.61 percent respectively after a report that the German government is conducting high-level discussions to smooth the path for a possible merger. France's Pernod Ricard was also among the top gainers in Europe. Its shares surged after the company said senior management had held talks with Elliott Management, following reports that Paul Singer's activist hedge fund had taken a stake in the drinks firm. The stock surged 5.91 percent and hit a fresh record high. Meanwhile, Danish jewelry maker Pandora slumped to the bottom of the index after Carnegie reportedly cut its price target for the firm by 7 percent Wednesday morning. It comes after weak sales momentum for the Copenhagen-listed company, with its shares tumbling 11.51 percent. UK leadership challenge Market focus is largely attuned to global trade developments, after Trump confirmed talks between Washington and Beijing were still ongoing. In an interview with Reuters on Tuesday, Trump also said he would intervene in the Justice Department's case against a top executive at Chinese telecoms giant Huawei if it would help serve national security interests or help U.S.-Sino trade talks. Trump's comments on a potential deal with China also translated into gains in equity markets stateside, with the Dow Jones Industrial Average climbing more than 300 points at the open. Investor sentiment was also buoyed by a report that China is looking to increase access to its market for foreign companies, in a bid to improve U.S.-China trade relations. Back in Europe, investors continued to monitor deepening political turmoil in the U.K. It comes amid an intensifying backlash against May's leadership while she tries to salvage her Brexit deal. The threshold of support needed to trigger a confidence vote in the prime minister was reached Tuesday evening, according to Graham Brady, chairman of the Conservative Party's '1922 Committee', a group of influential backbench members of parliament (MPs). The vote is scheduled to take place Wednesday evening between 6 p.m. and 8 p.m. London time. Sterling initially fell into negative territory on the news, before jumping 1.4 percent higher to around 1.2659 against the U.S. dollar. Source: CNBC
