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China-US trade hopes lift stocks as oil prices surge
NEW YORK, Jan 10, 2019 (BSS/AFP) – Global stocks pushed higher Wednesday
on renewed optimism over talks to resolve the China-US trade war, while oil
prices surged after Saudi Arabia confirmed it was on track to trim crude
exports.
Europe’s major stock markets followed Asian exchanges higher, with
Frankfurt and Paris both ending day 0.8 percent higher. London rose 0.7
percent.
Wall Street also had a solid day, with major indices rising for a fourth
straight session.
Gains in the US moderated somewhat in the final 40 minutes of trading
after talks to end the US government shutdown between President Donald Trump
and congressional Democratic leaders broke down. But the S&P 500 still
finished 0.4 percent higher.
“Stocks were extremely oversold,” said Bill Lynch of Hinsdale Associates.
“There’s optimism today that the market can continue to be strong.”
Brent crude oil pushed above $61 per barrel, with OPEC cutting output and
concerns easing over weak demand growth.
The dollar, meanwhile, sank to its lowest level against the euro since
October as Federal Reserve meeting minutes, and statements from Fed
officials, made clear the US central bank was in no hurry to hike interest
rates again soon.
The dollar also declined against the British pound, despite lingering
uncertainty over Brexit.
On Wednesday, in a setback to Theresa May, British lawmakers voted to
force the prime minister to quickly set out an alternative plan for Brexit if
she loses a crucial vote on her EU withdrawal deal next week.
After taking a battering in December and suffering a shaky start to 2019,
confidence is slowly returning to equity trading floors.
The gains follow calming comments last week from Federal Reserve Chair
Jerome Powell, followed by apparent progress in the US-China talks.
A member of the US delegation, Under Secretary for Trade and Foreign
Agricultural Affairs Ted McKinney, told reporters that the talks “went just
fine.”
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The Wall Street Journal said the two sides were moving in the right
direction, with China ready to buy more US goods and services, while further
talks at cabinet level were being lined up next week.
– Oil surges back from lows –
Oil prices — which have tumbled in recent months partly because of
worries about the impact on demand of the China-US trade war — rose sharply
after Saudi officials said they were committed to implementing the latest
OPEC agreement to boost prices.
Saudi Energy Minister Khalid al-Falih said the kingdom, the world’s top
crude supplier, would cut its exports to 7.2 million barrels a day in
January, down from 8.0 million bpd in November.
“We are serious about restoring balance to the market,” Falih told a press
conference in Riyadh.
“We are concerned about volatility in the oil market,” he said. “We have
seen peaks and drops in prices (that are) completely unjustified by the
fundamentals.”
Brent has climbed some 20 percent compared with just two weeks ago, prior
to an oil production cut by OPEC and non-cartel producers from January 1.
– Key figures around 2200 GMT –
New York – Dow: UP 0.4 percent at 23,879.12 (close)
New York – S&P 500: UP 0.4 percent at 2,584.96 (close)
New York – Nasdaq: UP 0.9 percent at 6,957.08 (close)
London – FTSE 100: UP 0.7 percent at 6,906.63 (close)
Frankfurt – DAX 30: UP 0.8 percent at 10,893.32 (close)
Paris – CAC 40: UP 0.8 percent at 4,813.58 (close)
EURO STOXX 50: UP 0.5 percent at 3,070.24 (close)
Tokyo – Nikkei 225: UP 1.1 percent at 20,427.06 (close)
Hong Kong – Hang Seng: UP 2.3 percent at 26,462.32 (close)
Shanghai – Composite: UP 0.7 percent at 2,544.34 (close)
Oil – Brent Crude: UP $2.72 at $61.44 per barrel
Oil – West Texas Intermediate: UP $2.58 at $52.36 per barrel
Dollar/yen: DOWN at 108.03 yen from 108.75 at 2200 GMT
Euro/dollar: UP at $1.1547 from $1.1441
Pound/dollar: UP at $1.2796 from $1.2717
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