LONDON, Sept 28, 2019 (BSS/AFP) – Stock markets in Europe climbed Friday
as fresh optimism about US-China trade talks took hold, analysts said.
The pound hit near four-week lows against the dollar amid Brexit
uncertainty.
London stocks were the continent’s top performer by the close, boosted by
the weaker currency.
A report by CNBC saying that US-China trade talks are to resume on October
10 was well received as it matched the market’s narrative seen in recent
sessions, analysts said.
Trade optimism “is overshadowing ramped-up political noise in Washington
and global growth uncertainties”, said analysts at Charles Schwab.
– Smiling faces –
But while “Europe kept a smile plastered on its face”, US markets were
more reticent, said Connor Campbell at Spreadex. The Dow index kicked the New
York session off on a stronger note, but then slipped into negative
territory.
However, Forex.com analyst Faward Razaqzada suggested US markets were
ready for a breakout after absorbing so much negative news recently.
“What can’t break you makes you stronger,” he said.
A move towards easier central bank monetary policy was helping sentiment,
he said.
Bank of England board member Michael Saunders appeared to open the door to
a rate cut, said Fiona Cincotta, senior market analyst at City Index trading
group.
– Pound tanks –
But the very same factor boosting stock sentiment caused the pound to
“tank”, she said.
“The comments from Saunders highlight the marked weakening of the UK
economy over recent quarters, dragged down not only by Brexit uncertainty but
also softer global growth,” Cincotta added.
The pound fell to $1.2271, the lowest point in nearly four weeks, before
clawing back some of its losses.
The weaker sterling pushed up share prices of multinationals listed on
London’s benchmark FTSE 100 index.
In commodities, crude prices steadied, having slipped earlier following
the swift recovery in Saudi production that slumped in the wake of attacks on
its oil infrastructure two weeks ago.