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LONDON — European stocks opened broadly higher on Wednesday, reversing negative sentiment in the previous session that was driven by regional fiscal concerns.
By 10:30 a.m. London time (5:30 a.m. ET), the pan-European Stoxx 600 was 0.6% higher, with most sectors and all major bourses posting gains.
Looking at individual stocks, Watches of Switzerland jumped 8% in early trade following a trading update and a stock upgrade by Deutsche Bank.
The company on Wednesday confirmed it was on track to deliver first-half results in line with its expectations, despite massive U.S. tariffs hitting its products.
“We have seen consistently strong trading throughout the period, particularly in the US despite the announcement of increased tariffs on Swiss imports,” it said in its trading update, adding that stability in the U.K. luxury watch and jewelry markets was continuing.
“We do not anticipate any material impact from the US tariffs in H1 FY26 as brand partners have increased inventories as shown by Swiss Watch Exports in July 2025 (+45% vs prior year),” the luxury watch retailer added.
U.S. President Donald Trump slapped Switzerland with a shock tariff rate of 39% in August, which has now taken effect.
Separately, Deutsche Bank upgraded Watches of Switzerland’s stock to a “buy” on Wednesday morning.
“We believe the downside risk to WOSG earnings driven by US import tariffs is much more contained than the shares are reflecting,” the investment bank’s Alison Lygo said in a note. “This is based on our view that where the real risk sits, demand for non supply constrained brands in the US, is a much smaller part of the gross profit pool than is perhaps appreciated.”
Wednesday’s positive momentum comes after European stocks tumbled on Tuesday as concerns over the fiscal outlook in major European economies drove bond yields higher.
The U.K.’s 30-year bond yield hit its highest level since 1998 as traders looked ahead to a contentious Autumn Budget. Meanwhile, France’s 30-year yield was at its highest since 2009 ahead of next week’s no confidence vote, which could see the government toppled over a fierce budget dispute.
Bond yields have been rising globally too, it should be noted, amid worries over President Donald Trump’s trade tariffs. U.S. Treasury yields jumped Tuesday after a federal appeals court on Friday ruled that most of his global trade duties are illegal. That raises the prospect of the government having to repay the money already brought in by the duties, putting more pressure on an already stressed U.S. fiscal situation.
Asia-Pacific markets traded mixed overnight as investors assessed the global bond market and the latest developments on the trade front, while U.S. stock futures edged higher after a federal court decision in an Alphabet antitrust case fueled optimism that the tech giants will be able to weather regulatory threats.
In Europe on Wednesday, earnings are set to come from Swiss Life Holding and Helvetia Holding. Data releases include the latest Turkish inflation print.
— CNBC’s Amala Balakrishner and Pia Singh contributed to this market report
