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EUROPE-MARKETS
Stock markets climb on trade talks optimism
LONDON, March 16, 2019 (BSS/AFP) – Stock markets rose Friday after US
President Donald Trump struck an upbeat note on trade talks with China, while
the pound ended a volatile Brexit-fuelled week on a strong note.
The main European markets all closed higher, and US stocks were also up in
the early New York afternoon with “reports of progress on the US-China trade
front seeming to buoy sentiment”, said analysts at Charles Schwab brokerage.
Tokyo’s main stocks index ended the day higher, too, despite the Bank of
Japan issuing a more downbeat assessment of the world’s third biggest
economy, as a broader global slowdown impacts exports and production.
“Brexit volatility appears to have calmed,” noted Joshua Mahony, senior
market analyst at IG trading group. “Meanwhile, US-China trade talk hopes
have improved.”
While concerns about the global growth outlook remain, investor confidence
has been supported by ongoing optimism that the United States and China will
eventually hammer out a deal to end their long-running trade row.
Trump on Thursday provided fresh cheer by telling reporters “we are doing
very well with China talks”, adding that “we are getting what we have to
get”.
He also said “one way or the other, we’re going to know over the next
three to four weeks”.
– ‘Talk is cheap’ –
On Friday, China approved a foreign investment law that will abolish the
forced transfer of technology from foreign firms to local joint-venture
partners, addressing a key point of anger in the White House.
“There’s still no guarantee that these (US-China talks) can be concluded,
but at least we’ve seen an indication that the wait will only be another
three to four weeks,” said James Hughes, chief market analyst at Axitrader.
“This has the potential to fuel risk appetite in the interim period.”
On currency markets the pound climbed versus the dollar and euro after a
week that saw wild fluctuations for the UK unit triggered by Brexit twists
and turns.
British Prime Minister Theresa May’s EU withdrawal agreement was this week
rejected by parliament for a second time.
But the divorce deal could yet return from the dead should hardcore
Brexiteers fear a delay could produce a softer Brexit that what is currently
on offer.
“There’s still a significant amount of tail risk in being overly exposed
to sterling” because of Brexit uncertainty, said Michael Hewson, chief market
analyst at CMC Markets UK.
“Ultimately talk is cheap, and markets require certainty, something that
still remains in short supply.”
BSS/AFP/HR/0945