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Markets fizz but trade row keeps dealers on edge
LONDON, Sept 26, 2018 (BSS/AFP) – Global stock markets edged higher
Tuesday as dealers tracked soaring oil prices, trade worries and corporate
newsflow on the eve of the Federal Reserve’s interest rate call.
Wall Street along with Frankfurt and Paris in Europe posted meagre gains,
with London climbed nearly 0.7 percent thanks to strong gains by energy
shares.
Asian bourses mostly rose in muted deals with Hong Kong and Seoul
remaining shut for public holidays.
“Investors continue to keep a weather eye on the trade war situation,”
said IG analyst Chris Beauchamp.
“But even without any further meaningful headlines on this front the
upcoming Fed meeting … means that most are content to await developments
rather than rushing in to try and join in the general bounce in equities seen
over the past week.”
– Oil boost –
Brent oil rebounded close to a four-year peak above $82 per barrel, on
worries over stretched global supplies due to US sanctions on Iran.
“Brent crude hit a level not seen since late 2014, and that underlines how
bullish the sentiment is,” said market analyst David Madden at CMC Markets
UK.
Energy firms enjoyed big gains on this week’s surge in oil prices, after
the world’s top producers agreed to maintain output despite pressure from US
President Donald Trump.
Higher oil prices translate into bumper profits and revenues for European
oil giants like BP, Royal Dutch Shell and Total.
Shares in BP climbed nearly 3 percent, while those in Shell rose 2.4
percent in London. In Paris, shares in Total added 1.3 percent.
Investors remain cautious after the latest tit-for-tat tariffs in the US-
China trade row.
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While the levies had been widely expected, there are concerns about how
long the dispute will last after China cancelled planned talks and said
negotiations “cannot be carried out under the threat of tariffs”.
Vice commerce minister Wang Shouwen said Tuesday it was impossible to
negotiate while Washington is imposing tariffs that are like “holding a knife
to someone’s throat”. He accused the US of abandoning a consensus struck in
May.
– Next please –
In London, shares in clothing retail chain Next soared almost 10 percent,
despite a warning over the risks of port delays and increased tariffs from a
possible no-deal Brexit. They closed with a gain of 7.8 percent.
The group also insisted that the direct risks of a no-deal scenario did
not “post a material threat to the ongoing operations and profitability of
Next’s business”.
Investors focused on positive news that Next upped its full-year profits
outlook after a bright first half.
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