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Stocks recover on US-China trade talks optimism
NEW YORK, Oct 10, 2019 (BSS/AFP) – European and US stock markets rebounded
Wednesday, helped by reports that China was open to a partial trade deal with
the United States in key talks this week.
Stocks had fallen sharply on Tuesday after new US sanctions on Chinese
entities prompted a brusque response from Beijing, setting a harsh tone ahead
of high-level trade talks due to begin Thursday.
But equities in both Europe and New York gained following reports that a
pared-down agreement was still possible that could link Beijing to higher
agricultural purchases in exchange for a hold on new US tariff measures.
“Yesterday it looked like everything was dead and today it seems there’s a
chance,” LBBW’s Karl Haeling said of the trade talks.
With less than a week to go before the next round of punitive tariffs is
due to hit, Beijing’s top trade envoy Liu He will Thursday meet US Trade
Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
Craig Erlam, senior market analyst at Oanda trading group, noted that
markets have misread the trade tealeaves before.
“Traders are jumping at the prospect of good news at the moment but
there’s been so many false dawns in these negotiations, this may just be the
latest,” he told AFP.
Federal Reserve minutes showed US central bankers have become more anxious
over a global slowdown even though the US outlook remains good for the
moment.
Futures markets expect the Fed to cut interest rates again later this
month.
Crude oil prices, which had rallied over one percent as Turkey launched an
offensive against Kurdish militants in northern Syria, trimmed gains after
data showed US oil output at record levels and stocks rising.
“It is a little worrying that inventories are rising despite lower prices,
as it suggests that demand is weak,” said market analyst David Madden at CMC
Markets UK.
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Among individual companies, Johnson & Johnson fell two percent after a
jury in Pennsylvania ruled the company should pay $8 billion in punitive
damages over the psychiatric drug Risperdal. The company said it would
appeal.
American Airlines jumped 3.1 percent as it said a key benchmark on revenue
rose to 2.5 percent from 1.5 percent in the third quarter, indicating strong
demand despite a hit from Hurricane Dorian and the continued effect of the
grounding of Boeing’s 737 MAX planes.
American again pushed back the timeframe for resuming flights on the MAX,
this time through mid-January.
– Key figures around 2050 GMT –
New York – Dow: UP 0.7 percent at 26,346.01 (close)
New York – S&P 500: UP 0.9 percent at 2,919.40 (close)
New York – Nasdaq: UP 1.0 percent at 7,903.74 (close)
London – FTSE 100: UP 0.3 percent at 7,166.50 (close)
Paris – CAC 40: UP 0.8 percent at 5,499.14 (close)
Frankfurt – DAX 30: UP 1.0 percent at 12,094.26 (close)
EURO STOXX 50: UP 0.9 percent at 3,459.14 (close)
Pound/dollar: DOWN at $1.2205 from $1.2219 at 2100 GMT
Euro/pound: UP at 89.89 pence from 89.67 pence
Euro/dollar: UP at $1.0972 from $1.0957
Dollar/yen: UP at 107.49 yen from 107.09 yen
Tokyo – Nikkei 225: DOWN 0.6 percent at 21,456.38 (close)
Hong Kong – Hang Seng: DOWN 0.8 percent at 25,682.81 (close)
Shanghai – Composite: UP 0.4 percent at 2,924.86 (close)
Brent North Sea crude: UP 0.1 percent at $58.32 per barrel
West Texas Intermediate: DOWN 0.1 percent at $52.59 per barrel
BSS/AFP/HR/1025