Trade-Talk Progress Lifts Global Stocks
December 12 2018 - 4:43AM
Dow Jones News
By David Hodari
Global stocks gained Wednesday on a fresh wave of trade
optimism, shrugging off a leadership challenge against U.K. Prime
Minister Theresa May.
Stocks in Europe opened higher, with the pan-continental Stoxx
Europe 600 index up 0.5% in the day's opening minutes, while the
British pound edged up 0.5% but remained near its lowest level in
20 months.
The yield on U.K. 10-year government bonds was last 1.20%,
having ticked up from 1.18% late Tuesday. Yields rise as prices
fall. The U.K.'s FTSE 100 index was last up 0.4%, broadly in line
with mild gains elsewhere in Europe, while the FTSE 250 was up
0.1%.
Lawmakers in the U.K.'s ruling Conservative party took the steps
to initiate a no-confidence vote against embattled Prime Minister
Theresa May. Mrs. May on Monday had postponed a parliamentary vote
on her Brexit bill, which prompted a new volley of criticism over
her handling of the country's exit from the European Union.
Global trading remained broadly upbeat, with U.S. futures
putting the S&P 500 and the Dow Jones Industrial Average on
course to rise 0.4% at the open.
Rises in Europe echoed gains in Asia-Pacific, where the Nikkei
climbed 2.2% and Hong Kong's Hang Seng Index rose 1.6% as signs of
a further softening in trade tensions revived risk appetite.
Taiwanese and South Korean benchmarks both increased more than
1%.
Details continued to emerge from the first trade talks between
Washington and Beijing, with China agreeing to reduce auto tariffs
and boost purchases of soybeans and other crops.
The warming U.S.-China trade relations prompted cautious
optimism among some investors.
"Global trade is one of the most important issues for markets
going into 2019," said Viktor Hjort, global head of credit strategy
at BNP Paribas. "The positive angle is that U.S. and Chinese
negotiators appear to be making an effort, but I think at this
point, any absence of bad news is good news."
President Trump said in an interview with Reuters he would
intervene in the Justice Department's case against Huawei Chief
Financial Officer Meng Wanzhou if it would help smooth a trade deal
with China.
The Chinese yuan was last up 0.2% against the U.S. dollar.
Meanwhile, the WSJ Dollar Index was last down 0.1%, its five-day
gains eroded to 0.5%.
U.S. investors were also keeping an eye out for inflation data,
due out later in the day.
Elsewhere in Europe, investors were monitoring the reaction to
French President Emmanuel Macron's decision to cut taxes in the
wake of protests. The move may test the European Union's budgetary
rules and embolden other members, such as Italy, to do the
same.
In commodities, Brent crude oil prices were last up 0.65% at
$60.59 a barrel, while gold was up 0.2% at $1,249.30 a troy
ounce.
Write to David Hodari at David.Hodari@wsj.com
(END) Dow Jones Newswires
December 12, 2018 04:28 ET (09:28 GMT)
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