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Equity markets jump as Trump hints at trade progress
NEW YORK, Oct 11, 2019 (BSS/AFP) – Global stocks mostly rose Thursday on
hopes for progress in the US-China trade dispute, while the British pound
jumped on optimism of a breakthrough in Brexit talks.
Markets rallied following US President Donald Trump’s tweet announcing a
planned meeting Friday with Vice Premier Liu He, raising hopes about
prospects for high-level trade negotiations that resumed Thursday.
Stocks have gyrated this week in response to conflicting signals from
Washington and Beijing, tumbling after the US announced new restrictions on
Chinese companies over human rights abuses and rallying on reports
emphasizing the possibility of a narrow agreement that averts further
tariffs.
“It’s been a roller-coaster ride heading into these much-awaited talks,”
said Art Hogan, chief market strategist at National Securities. “We hope they
come to some sort of small agreement that calls for a truce and no new
tariffs.”
The talks come ahead of new tariffs scheduled to take effect next week and
aim to resolve a trade war that has been going on for more than a year.
European stock markets, which had been going nowhere until the Trump took
to Twitter, all closed higher in response.
US stocks also advanced, with the S&P 500 winning 0.6 percent.
– Pound spikes on Brexit hopes –
Meanwhile, in foreign exchange markets, the pound spiked after British
Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar said they
could see a route towards striking a possible Brexit divorce deal, following
a crunch meeting on Thursday.
“Both continue to believe a deal is in everybody’s interest. They agreed
that they could see a pathway to a possible deal,” the pair said in a joint
statement.
Market participants saw the statement as surprisingly confident, and some
felt it could be pointing to a real chance that a no-deal Brexit, the nemesis
of financial markets, could yet be avoided.
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“The announcement is decidedly upbeat in its tone and while it stops well
short of suggesting a deal is imminent it has been warmly welcomed in the
markets,” said David Cheetham at XTB.com.
But BK Asset Management’s Kathy Lien, citing a Sky News report that said
British officials were proposing a narrow free-trade agreement with the EU,
cautioned that the pound remained vulnerable.
“We’re skeptical that the EU will find any agreement palatable but
investors are latching onto any piece of good news as the price action
reflects a great degree of optimism,” Lien said.
“Of course, sentiment could shift quickly if Germany or the EU casts doubt
on a deal so its unadvisable to rush into any major positions before a firm
outcome is known.”
– Key figures around 2040 GMT –
New York – Dow: UP 0.6 percent at 26,496.67 (close)
New York – S&P 500: UP 0.6 percent at 2,938.13 (close)
New York – Nasdaq: UP 0.6 percent at 7,950.78 (close)
London – FTSE 100: UP 0.3 percent at 7,186.36 (close)
Paris – CAC 40: UP 1.3 percent at 5,569.05 (close)
Frankfurt – DAX 30: UP 0.6 percent at 12,164.20 (close)
EURO STOXX 50: UP 0.9 percent at 3,493.96 (close)
Tokyo – Nikkei 225: UP 0.5 percent at 21,551.98 (close)
Hong Kong – Hang Seng: UP 0.1 percent at 25,707.93 (close)
Shanghai – Composite: UP 0.8 percent at 2,947.71 (close)
Euro/dollar: UP at $1.1006 from $1.0971 at 2100 GMT
Dollar/yen: UP at 107.88 yen from 107.48 yen
Pound/dollar: UP at $1.2440 from $1.2206
Euro/pound: DOWN at 89.56 pence from 89.89 pence
Brent North Sea crude: UP 1.3 percent at $59.10 per barrel
West Texas Intermediate: UP 1.8 percent at $53.55 per barrel
BSS/AFP/HR/0940