Global stocks gain on trade hopes, risk appetite lifts dollar

By Herbert Lash NEW YORK (Reuters) - The dollar strengthened and global stock markets rallied on Monday on signs the United States and China are nearing the end of a damaging trade war as well as indications the world economy may dodge a recession.

Reuters November 05, 2019 04:06:46 IST
Global stocks gain on trade hopes, risk appetite lifts dollar

Global stocks gain on trade hopes risk appetite lifts dollar

By Herbert Lash

NEW YORK (Reuters) - The dollar strengthened and global stock markets rallied on Monday on signs the United States and China are nearing the end of a damaging trade war as well as indications the world economy may dodge a recession.

The three major U.S. stock indexes closed at fresh record highs and MSCI's gauge of equity performance across the globe rose to less than 2% from an all-time peak set in January 2018.

Beijing and Washington spoke Friday of progress in trade talks and U.S. Commerce Secretary Wilbur Ross said on Sunday licenses for U.S. companies to sell components to China's blacklisted Huawei Technologies Co will come shortly.

Washington has effectively banned federal agencies from buying Huawei telecommunications equipment and barred U.S. companies from doing business with Huawei, citing national security.

Gold edged lower while the dollar gained on higher risk appetite as trade hopes grew after Ross said there was no reason a deal could not be on track for signing this month.

A generally upbeat U.S. employment report on Friday raised optimism a slowing U.S. economy was not headed toward recession.

"Market trends are being influenced by a better risk mood overall," said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

European shares rallied more than 1%, with many reaching their highest level since January 2018. The STOXX 600 index <.STOXX> of small, mid-sized and large companies across Europe surged to highs last seen in July 2015.

Tariff-exposed European miners <.SXPP> gained 2.9% while auto stocks <.SXAP> also rose 2.9%. Reports that Fiat Chrysler and Peugeot owner PSA aimed to sign a final merger agreement as early as next month also lifted stocks.

Earlier, trade hopes sent Asian stocks surging, with MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rising 1.3%.

Technology stocks boosted Wall Street, with the Philadelphia Semiconductor index <.SOX> hitting a new high, up 2.2%.

MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.54% while its emerging markets rose 1.46%.

"Signing these deals takes time. All that is needed for markets to be happy right now is for an agreement to be announced," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

On Wall Street, the Dow Jones Industrial Average <.DJI> rose 114.75 points, or 0.42%, to 27,462.11. The S&P 500 <.SPX> gained 11.36 points, or 0.37%, to 3,078.27 and the Nasdaq Composite <.IXIC> added 46.80 points, or 0.56%, to 8,433.20.

The euro slipped as investors awaited Christine Lagarde's first speech as European Central Bank president. But the single currency remained near multiple-week highs after Ross said Washington may not slap tariffs on imported vehicles after "good conversations" with automakers in the European Union, Japan and Korea.

The dollar index <.DXY> rose 0.31%, with the euro down 0.34% to $1.1127. The Japanese yen weakened 0.37% versus the greenback at 108.57 per dollar.

Euro zone and U.S. bond yields rose on optimism a U.S.-China trade deal appeared near.

Data on Monday showed morale among investors in the euro zone jumped in November to its highest since June.

Germany's benchmark 10-year Bund yield rose to -0.35% while the benchmark 10-year U.S. Treasury note fell 14/32 in price to push its yield up to 1.7770%.

Oil prices rose, buoyed by an improved outlook for crude demand as better-than-expected U.S. jobs growth fed hopes.

Brent crude futures for January rose 44 cents to settle at $62.13 a barrel. U.S. crude futures settled up 34 cents at $56.54 a barrel.

Spot gold dropped 0.4% to $1,507.25 an ounce.

For a graphic on Chinese yuan:

https://fingfx.thomsonreuters.com/gfx/mkt/12/8175/8106/Chinese%20yuan%20rises%20to%20highest%20since%20August.png

(Reporting by Herbert Lash, additional reporting by Gertrude Chavez-Dreyfuss, Editing David Gregorio and Alistair Bell)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.