LONDON (Reuters) – Miners, autos, tech, and oil stocks surged on Monday, driving Europe’s main benchmarks up strongly after U.S. and Chinese leaders agreed a temporary truce in a trade war.

U.S. President Donald Trump and Chinese President Xi Jinping reached a truce at the G20 meeting on Saturday, halting additional tariffs and agreeing to fresh talks aimed at reaching an agreement within 90 days.

Although markets reacted positively, some investors and analysts said the outcome had already been partly anticipated and there remained much for the two to agree upon.

The pan-European STOXX 600 index ended off highs, up 1 percent, having climbed as much as 2.1 percent earlier in the day and having been set at one point for its best day in eight months.

Germany’s DAX .GDAXI – the most sensitive to China and trade war fears – led the way with a 1.9 percent rise to its highest level since Nov 15.

Both the STOXX 600 and the DAX remain sharply lower so far this year, down around 7 and 11 percent respectively.

“While President Trump described the bilateral meeting with China as “amazing and productive”, we believe the rivalry between the U.S. and China will not be easily overcome, especially over the issue of intellectual property and market access,” said UBS Wealth Management CIO Mark Haefele in a note.

Goldman Sachs analysts said the announcement strengthened their view that “Trump is likely to want to conclude an agreement – even if it does not include a full rollback of tariffs – well ahead of the 2020 presidential election”.

Financials were the biggest driver of European shares as China-exposed bank HSBC (HSBA.L) rose 2.4 percent and investors cheered the prospect of an end to a trade war which has dented growth.

Mining stocks .SXPP led the gains and were up 4.3 percent on the news which gives China, the world’s biggest metals consumer, more wiggle room in the next few months.

Antofagasta (ANTO.L), Anglo American (AAL.L), and Glencore (GLEN.L) were up between 3.7 and 7.8 percent.

Car stocks .SXAP, which have been battered by fears of rising tariffs, jumped 3.1 percent after Trump said China had agreed to cut import tariffs on U.S.-made cars.

German carmakers Daimler (DAIGn.DE), BMW (BMWG.DE), and Volkswagen (VOWG_p.DE) climbed 2.9 to 4.8 percent, while tire maker Continental (CONG.DE) gained 3.3 percent and Faurecia (EPED.PA) rose 5.6 percent.

Tech stocks .SX8P jumped 2.6 percent with chipmakers the best-performing. Infineon (IFXGn.DE), STMicroelectronics (STM.MI), and AMS (AMS.S) gained 3.8 to 6 percent.

Overall, analysts have cut their 2019 earnings growth expectations for world stocks over the past month as concern grew that a trade war would compound the impact of a slowing global economy.

The oil sector .SXEP also jumped 2.1 percent as crude soared ahead of this week’s OPEC meeting, expected to result in a supply cut.

Luxury stocks highly sensitive to China were also among top gainers, with heavyweight conglomerate LVMH (LVMH.PA) up 5 percent and Gucci owner Kering (PRTP.PA) rising 7.7 percent.

Away from the trade war relief, shares in French supermarkets Carrefour (CARR.PA) and Casino (CASP.PA), fell 5.8 and 3.7 percent respectively after riots in Paris on Saturday.

Argenx (ARGX.BR) topped the STOXX with an 12.7 percent gain after the Netherlands-based biopharma company said it had signed a deal worth potentially up to $1.6 billion with Johnson & Johnson affiliate Cilag to develop its Cusatuxumab drug in certain types of cancer.

GlaxoSmithKline (GSK.L) suffered their biggest one-day drop in more than a decade, down 7.6 percent, after it agreed to buy U.S. cancer specialist Tesaro (TSRO.O) for $5.1 billion, a costly investment to rebuild the pharmaceuticals business by new CEO Emma Walmsle.

“There is no doubt that GSK needs to bolster its pipeline but given the competition Tesaro faces… and the relative lack of synergies with GSK’s existing oncology pipeline, we are not convinced that this is the best way to do so,” said Liberum analyst Graham Doyle.

Graphic: Global earnings growth expectations Dec 3 – tmsnrt.rs/2Q9fNPZ

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