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Global stocks rise on hopes of US-China trade deal
NEW YORK, Feb 14, 2019 (BSS/AFP) – Global stocks rose Wednesday on
optimism over US-China trade talks, while oil prices gained after the
International Energy Agency reported lower output from OPEC producers.
Bourses in Asia and Europe advanced, taking cues from Tuesday afternoon
when Wall Street rallied on President Donald Trump’s statement that he could
delay new tariffs on Chinese goods set to take effect March 1 if a deal is
close.
US stocks also climbed Wednesday, although the gains were more modest than
in the prior day.
A report in the South China Morning Post said Xi would personally meet the
US delegation in Beijing, suggesting a redoubled effort to make progress on a
deal.
Some analysts struck a cautious tone, however, noting that much work needs
to be completed before a framework trade agreement between China and the US
could be reached.
“The rally in stocks has been based on hope rather than any concrete
agreements overnight,” warned Oanda senior analyst Jeffrey Halley, predicting
short-term volatility to come as headlines emerge from Beijing.
Fiona Cincotta at City Index agreed that “if we don’t start seeing
something more tangible by March investors are going to get nervous again.”
– Questionable catalyst –
Meanwhile, Briefing.com analyst Patrick O’Hare suggested some of the
market’s latest gains are the result of little more than momentum and the
fear of missing out on further gains.
O’Hare critiqued the market’s positive reaction to the dimming likelihood
of another US government shutdown, calling the response evidence of the
“dysfunctional” nature of Washington.
“The trading excitement over avoiding another government shutdown is like
getting excited over the idea that your bank is going to be open for business
on a Wednesday,” he said in a note posted to the financial website.
“That’s not a surprise. It’s a normal course of business for banks to be
open on a Wednesday.”
MORE/HR/1012
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Meanwhile, oil prices gained, with the Brent futures contract in London
gaining almost two percent following an IEA report that said the Organization
of the Petroleum Exporting Countries in January had largely complied with an
agreement to cut output.
The dollar continued to advance against the euro. Besides lackluster
eurozone data, drivers of the currency’s retreat include political troubles
in Spain, said BK Asset Management’s Kathy Lien.
The pound briefly rose above $1.29 before falling back as Prime Minister
Theresa May was accused by the opposition of “running down the clock” and
“playing chicken” with Brussels over Brexit talks.
– Key figures around 2150 GMT –
New York – Dow: UP 0.5 percent at 25,543.27 (close)
New York – S&P 500: UP 0.3 percent at 2,753.03 (close)
New York – Nasdaq: UP 0.1 percent at 7,420.38 (close)
London – FTSE 100: UP 0.8 percent at 7,190.84 (close)
Frankfurt – DAX 30: UP 0.4 percent at 11,167.22 (close)
Paris – CAC 40: UP 0.4 percent at 5,074.27 (close)
EURO STOXX 50: UP 0.4 percent at 3,202.37 (close)
Tokyo – Nikkei 225: UP 1.3 percent at 21,144.48 (close)
Hong Kong – Hang Seng: UP 1.2 percent at 28,497.59 (close)
Shanghai – Composite: UP 1.8 percent at 2,721.07 (close)
Euro/dollar: DOWN at $1.1270 from $1.1326 at 2200 GMT Tuesday
Pound/dollar: DOWN at $1.2848 from $1.2892
Dollar/yen: UP at 111.02 yen from 110.48 yen
Oil – Brent Crude: UP $1.19 cents at $63.61 per barrel
Oil – West Texas Intermediate: UP 80 cents at $53.90 per barrel
BSS/AFP/HR/1015