By David Randall
NEW YORK, July 5 (Reuters) - Stock markets in Europe and the U.S. advanced on Thursday as reassuring economic data from Germany and a report that its big carmakers could be spared from U.S. tariffs offset another gloomy session for Asia.
Shares of Mercedes-maker Daimler DAIGn.DE , BMW BMWG.DE , Porsche PSHG_P.DE and Volkswagen VOWG_p.DE surged as much as 5 percent after reports of a U.S. offer to suspend tariff threats on EU-made cars if the bloc lifts duties on U.S. vehicles. fueled wider gains, with the European auto sector .SXAP enjoying its best day in more than two years. The mood was also helped by a stronger-than-expected jump in German industrial orders after four months of declines. these stories coming out (about car tariffs), you have a sector which has been very oversold meeting some potential good news on the trade war front," said Bank of America Merrill Lynch (NYSE:BAC) European equity strategist James Barty.
"This is going to be the dominant issue of the summer. Are we heading for a full-blown trade war? In which case, it is very bad news for risk assets; or do we walk away from it, in which case, as we have seen today, markets are likely to rebound quite sharply."
On Wall Street, the Dow Jones Industrial Average .DJI rose 74.82 points, or 0.31 percent, to 24,249.64, the S&P 500 .SPX gained 8.18 points, or 0.30 percent, to 2,721.4 and the Nasdaq Composite .IXIC added 25.23 points, or 0.34 percent, to 7,527.90.
MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.23 percent.
The euro briefly topped $1.17 EUR=EBS and bond yields rose after the brighter German data and a report that the ECB thinks markets are now too cautious on when it will raise euro zone interest rates next year. FRX/
Later in the day, traders will get the minutes from last month's U.S. Federal Reserve policy meeting, when it raised U.S. rates for a second time this year. euro is getting a bit of a lift on the German data though the trade concerns will continue to dominate markets with the Fed minutes being the key data point," said Kenneth Broux, a currency strategist at Societe Generale (PA:SOGN) in London.
ASIAN ANGST
Persisting concerns over U.S. President Donald Trump's trade tariff plans extended a recent slide in Asian equity markets overnight, in particular Chinese shares which are now deep into "bear" market territory.
On Friday, U.S. tariffs on $34 billion worth of Chinese imports will take effect. Beijing promised to retaliate in kind, though it said it would "absolutely not" fire the first shot in a trade war. broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS , which has dropped every day except three since mid-June, ended down 0.25 percent.
In commodities, Brent oil futures LCOc1 U.S. crude CLcv1 rose 0.03 percent to $74.16 per barrel and Brent LCOcv1 was last at $78.38, up 0.18 percent, a day after U.S. President Donald Trump sent a tweet demanding that OPEC reduce prices for crude. O/R had risen on Wednesday on a threat from an Iranian commander to disrupt oil shipments from neighboring states if Washington continued to press all countries to stop buying Iranian oil, and a drop in U.S. crude inventories.
(Editing by Bernadette Baum)