LONDON (Reuters) – European shares hit five-month highs on Monday with cyclical stocks outperforming defensives, helped by hopes over a deal to end the U.S.-Sino trade war.

The pan-regional STOXX 600 index rose as much as 0.6 percent during the session to its highest level since Oct. 5 before paring some gains and ending up 0.2 percent on the day.

U.S. President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit around March 27 given progress in talks between the two countries, the Wall Street Journal reported on Sunday.

“A deal between the two biggest economies would end the climate of uncertainty which has been detrimental for assets perceived as riskier, such as stocks,” ActivTrades analyst Pierre Veyret said.

“However, traders have already priced in a potential agreement and this might increase the downside risks as many abide to the rule: ‘buy the rumor, sell the news’,” he added.

The STOXX 600 is up more than 11 percent so far this year and a Reuters poll last week has shown investors expect the index to end the year near its current levels.

Further weighing toward the end of the session was weaker-than-expected construction data from the United States that pushed Wall Street into negative territory.

Among top movers in Europe on Monday were shares in IAG , which hit a two-month low after the owner of British Airways and Iberia issued a clarification to say its 2019 free cash flow would be lower than last year.

Its shares fell 4.8 percent, leading fallers on the STOXX.

Shares in Nordea, the Nordic region’s largest bank, fell 3.5 percent on allegations of money laundering aired on Monday by Finnish broadcaster Yle.

According to Yle, Nordea handled some 700 million euros ($790 million) in suspicious transactions between 2005 and 2017.

Nordea said it had no immediate comment.

Ted Baker ended higher after Ray Kelvin resigned as chief executive of the fashion retailer, seeking to allow the fashion brand he founded to move on from misconduct allegations stemming from his habit of hugging colleagues.

Elsewhere, Britain’s Rotork fell 3.5 percent after disappointing earnings, while Swiss utility Alpiq shed 1.3 percent after reporting its fourth annual loss in five years as its hydropower and nuclear facilities again struggled.

Among top gainers were the shares of publisher Daily Mail & General Trust, which jumped 4.5 percent after announcing plans to return all of its shares in Euromoney Institutional Investor and 200 million pounds ($265 million) cash to eligible shareholders.

French perfumes maker Interparfums rose 4.4 percent after raising its full-year revenue guidance following a strong start to the year.

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