LONDON (Reuters) – Trade talks between the world’s two biggest economies helped European shares rise on Wednesday, while the threat of a blocked merger sank shares in British supermarket Sainsbury’s and a money laundering scandal hit Swedbank.

Germany’s trade-sensitive DAX led the way with a 0.8 percent gain and the pan-European STOXX 600 rose 0.7 percent after U.S. President Donald Trump said on Tuesday that trade talks with China were going well.

Although autos, which are vulnerable to rising protectionism, jumped 2.4 percent but there were still reasons for investors to remain cautious.

“There’s no big material news out there that will give us a sustained uptick to markets,” Gary Waite, portfolio manager at Walker Crips Investment Management, said.

British supermarket chain Sainsbury’s and Swedish lender Swedbank marred the positive picture overall.

Sainsbury’s shares sank 18.5 percent after Britain’s competition regulator said its merger with Asda should either be blocked or need significant concessions.

“Investors are rightly accepting that this deal is dead in the water”, commented Neil Wilson from Markets.com.

Britain’s retail index fell 2.9 percent with rivals like Morrison losing 5.3 percent.

Swedbank shares ended the day 13.6 percent down after Estonia said it was investigating allegations linking Swedbank to suspicious transactions in the country involving Danske Bank.

The top gainers — Glanbia and Simcorp — were boosted by strong results.

Irish nutrition company Glanbia jumped 12.9 percent after its fourth-quarter results, while Danish software company Simcorp also rose 7 percent after announcing strong results and a share buyback program.

“Glanbia’s FY results confirm a strong finish to 2018 and were ahead of forecasts at the revenue, EBITA and EPS reporting lines,” said Davy Research analysts, adding they upgraded their full-year 2019 EPS forecasts by 5 percent.

Fresenius shares jumped 5 percent after it said it expects earnings to grow faster than sales from 2020 after investments dent profit this year.

Air France-KLM took 6.1 percent after it pledged new efficiency gains to offset higher fuel costs this year.

Overall, analysts have been overwhelmingly negative on European earnings, downgrading their estimates consistently.

“While the earnings season is OK, if you look at forward looking guidance it doesn’t strike me as if there’s a reason to be too bullish on markets going beyond the end of this year,” said Walker Crips’ Waite.

(Graphic: MSCI Europe earnings FEB 20 – tmsnrt.rs/2BLszLl)

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