Stocks gain on U.S.-China trade hopes, dollar flat
By Herbert Lash NEW YORK (Reuters) - Global equity markets gained and the dollar held steady on Thursday ahead of the G20 summit where a scheduled meeting of U.S. President Donald Trump and Chinese President Xi Jinping has stirred hopes that trade tensions could ease. White House economic adviser Larry Kudlow told Fox News there were no preconditions and nothing was agreed before the Trump-Xi meeting on Saturday
By Herbert Lash
NEW YORK (Reuters) - Global equity markets gained and the dollar held steady on Thursday ahead of the G20 summit where a scheduled meeting of U.S. President Donald Trump and Chinese President Xi Jinping has stirred hopes that trade tensions could ease.
White House economic adviser Larry Kudlow told Fox News there were no preconditions and nothing was agreed before the Trump-Xi meeting on Saturday. Earlier, a Hong Kong report indicated a truce had been reached, which eased worries Trump would impose new tariffs on $300 billion in Chinese goods.
The trade war has crimped manufacturing and begun to slow growth, so hopes for a truce rekindled investor interest in riskier assets and weighed on safe havens.
Optimism was tempered by a Wall Street Journal report that Xi planned to present Trump with a set of terms Washington should meet before Beijing is ready to settle.
"I continue to be very skeptical that the U.S., at least this current administration, will reach a deal with China," said Kristina Hooper, chief global market strategist at Invesco in New York.
"I can't find any compelling reasons why China would make real concessions to the U.S.," Hooper said.
The dollar index, which tracks the dollar against the euro, Japanese yen, sterling and three other currencies, traded slightly lower at 96.200. The dollar was little changed against the euro and the yen.
MSCI's gauge of stocks across the globe gained 0.42%, while both the pan-European STOXX 600 index and the FTSEurofirst 300 index of leading regional shares closed basically at break-even.
Stocks on Wall Street mostly gained, though the Dow industrials closed slightly lower.
The Dow Jones Industrial Average fell 10.24 points, or 0.04%, to 26,526.58. The S&P 500 gained 11.14 points, or 0.38%, to 2,924.92 and the Nasdaq Composite added 57.79 points, or 0.73%, to 7,967.76.
Healthcare rose 0.62% and financials gained 0.92%, with big lenders leading the charge ahead of results of the second part of the Federal Reserve's annual stress test for banks. Semiconductor companies, which have a sizable revenue exposure to China, traded higher, with the Philadelphia Semiconductor index rising 1.47%.
U.S. Treasury debt yields fell on concerns that trade discussions between the United States and China on Saturday may be more complicated than previously expected.
News headlines suggest that "the meeting in Osaka is going to be a lot more tense than some of the initial optimism suggested," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.
The benchmark 10-year U.S. Treasury note rose 10/32 in price to push its yield lower to 2.0140%.
German government bond yields fell back toward record lows after data showed annual inflation in the euro zone's biggest economy remained well below the European Central Bank's target.
Germany's 10-year bond yield was down 1.2 basis points at minus 0.32%, nearing Tuesday's record low of minus 0.336%.
Oil prices settled little changed, weighed by concerns over whether the G20 summit will produce a breakthrough on trade and perceptions that supply is ample despite prospects for continued curbs by the Organization of Petroleum Exporting Countries.
Brent crude, the global benchmark, rose 6 cents to settle at $66.55 a barrel. U.S. West Texas Intermediate crude settled up 5 cents to $59.43.
U.S. gold futures settled 0.2% lower at $1,412 an ounce.
(Reporting by Herbert Lash in New York; Editing by David Gregorio)
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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
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.