Markets rise as Beijing and Washington avert trade war

Markets rise as Beijing and Washington avert trade war

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LONDON: Global stock markets mostly rose on Monday (May 21) after the US and China said they had agreed to hold off imposing tariffs, averting a damaging trade war at least for now.London stocks ended the session with a gain of 1.0 per cent and Paris closed 0.4 per cent higher, while Frankfurt was shut for a public holiday.
The Milan stock market however dropped 1.5 per cent, amid concerns that Italy is inching towards becoming the first EU founding member to have a eurosceptic government.On the other side of the Atlantic, Wall Street was in positive territory, with the Dow Jones gaining more than one percent.After high-level talks in Washington, economic superpowers China and the United States revealed a deal had been hammered out, ending months of tension that had sent financial markets into a spin.Treasury Secretary Steven Mnuchin told Fox News on Sunday that "right now we have agreed to put the tariffs on hold" while Xinhua reported China's Vice Premier Liu He as saying "the two sides reached a consensus, will not fight a trade war, and will stop increasing tariffs on each other".
While short on detail, the announcements provided much relief to investors, who had been fearing the imposition of levies on billions of dollars of exports between the two sides."The FTSE is trading at fresh record highs into the new week," said Accendo Markets analyst Mike van Dulken."The latest leg comes courtesy of a calming in US-China trade war rhetoric, which merely adds to the general positive momentum of late.""Markets acted with relief that the US seems to be taking a more conciliatory approach to trade with China and sanctions on Iran," said Jasper Lawler at London Capital Group.
"Investors jumped two feet back into equities and kept up a bullish dollar bet that has decimated the value of most other global currencies over the last month."DOLLAR RALLIESThe positive news lifted the greenback, which had faced some selling pressure after Donald Trump imposed tariffs on some steel and aluminium imports to the dismay of major US trade partners."After the US-China agreement on backing off from imposing trade tariffs on each other, one risk-off factor was removed, which pushed the dollar up against the yen," Marito Ueda, senior dealer at FX Prime in Tokyo, told AFP.Looking at sterling, Forex.com analyst Fawad Razaqzada said the pound had started the week lower, "suggesting market participants are not too optimistic about the prospects of a breakthrough in Brexit talks ahead of the next round of negotiations with Brussels on Tuesday."Traders are also awaiting the release on Wednesday of minutes from the US Federal Reserve's last policy meeting, hoping for fresh clues about its plans for raising interest rates.Continuing improvement in the US economy has fanned expectations the central bank will lift borrowing costs four times this year.Key figures around 1600 GMT:New York - Dow: UP 1.1 per cent 24,983.18 pointsLondon - FTSE 100: UP 1.0 per cent at 7,859.17 (close)Paris - CAC 40: UP 0.4 per cent at 5,637.51 (close)Frankfurt - DAX 30: closedMilan - FTSE MIB: DOWN 1.5 per cent at 23,092.38 (close)EURO STOXX 50: FLAT at 3,572.57Tokyo - Nikkei 225: UP 0.3 per cent at 23,002.37 (close)Hong Kong - Hang Seng: UP 0.6 per cent at 31,234.35 (close)Shanghai - Composite: UP 0.6 per cent at 3,213.84 (close)Euro/dollar: UP at US$1.1769 from US$1.1741Pound/dollar: DOWN at US$1.3415 from US$1.3428Dollar/yen: DOWN at 111.09 yen from 111.17 yenOil - Brent North Sea: UP 34 cents at US$78.85 per barrelOil - West Texas Intermediate: UP 67 cents at US$72.04 per barrel
Source: AFP/de
 Source : http://www.channelnewsasia.com/news/business/markets-rise-as-beijing-and-washington-avert-trade-war-10255472