- Airbus shares rise on potential Chinese aircraft orders
- German cabinet plans tax relief package to boost economy
- Voestalpine forecasts rise in annual core earnings, shares up
June 4 (Reuters) - European shares rose on Wednesday with Germany's benchmark index nearing a record high ahead of a first tax relief package aimed at kick-starting growth in the region's largest economy.
The German cabinet wants to approve the package on Wednesday, a spokesperson from the finance ministry said earlier this week to support companies.
That would come ahead of latest survey showing euro zone business activity barely expanded in May and Germany's services sector recorded its sharpest contraction in activity in more than two years, weighed down by falling demand that has plagued the bloc for a year.
The pan-European STOXX 600 was up 0.5% at 0824 GMT. Germany's blue-chip index advanced 0.9%, outperforming France's 0.6% gain, the UK's 0.1% rise and Spain's 0.2% climb.
However, the sentiment remained cautious as Wednesday marks the deadline for U.S. trading partners to submit their proposals for deals that might help them avoid Trump's hefty "Liberation Day" tariffs from taking effect. United States and China are also expected to talk this week to iron out trade differences.
The benchmark STOXX index has rallied about 15% from its early April lows as U.S. President Donald Trump paused sweeping tariffs, including those on China and struck a trade agreement with the UK.
"Our view was that China and Europe would always be the hardest for the U.S. to agree on a tax deal," said Viresh Kanabar, macro strategist - asset allocation at Macro Hive.
"Since Trump walked back his excessive tariffs on China, the markets said, we sort of know the worst case at this stage. If it happens, it will be bad, but it won't be recessionary bad."
Most European sectors advanced, with miners and technology leading the pack.
Among individual movers, Airbus S shares rose 3.2% after Bloomberg News reported Chinese airlines are considering ordering hundreds of aircraft as soon as next month.
Voestalpine rose 4.3% after the Austrian steelmaker forecast a small rise in its annual core earnings.
Conversely, Remy Cointreau erased early losses to rise 3% after the chief executive of the French spirits group said "the worst has passed" after the firm abandoned its 2030 sales growth ambitions.
B&M fell about 6% after the British discount retailer reported a disappointing annual profit and said its full-year sales came in short of expectations on weak demand from UK consumers.
Attention will shift to the European Central Bank's policy meeting on Thursday, in which a quarter-point rate cut is widely expected.
In addition, a crucial U.S. jobs report will take centre stage on Friday for clues about the Federal Reserve's next steps.
Reporting by Medha Singh and Sanchayaita Roy in Bengaluru; Editing by Janane Venkatraman
Source: Reuters