Global Stocks Extend Gains as Trade Tensions Cool
May 22 2018 - 06:43AM
Dow Jones News
By Riva Gold
-- FTSE 100 breaks new ground
-- Italian assets steady
-- Chinese stocks inch higher
European stocks and S&P 500 edged up Tuesday after waning
concerns about trade tensions between the U.S. and China helped
send major global indexes to their highest close in months.
The Stoxx Europe 600 inched up 0.1% late morning while the
U.K.'s FTSE 100 rose 0.2% from a record close, supported for most
of May by gains in the U.S. dollar against the British pound and a
rally in commodity prices that has lifted shares of energy and
mining companies.
The banking sector drove most of the gains in Europe on Tuesday
with shares of HSBC, Santander and UBS Group each up around 1%.
Italian banks also climbed, with the FTSE Italia All-Share Banks
Index up 0.4% after falling over 6% in the two previous sessions
amid worries about the country's new political agenda.
Over the weekend, party members approved a plan for a package of
deep tax cuts and welfare spending with calls to revise the budget
rules that govern the European Union's single currency. Italy's two
antiestablishment parties on Monday nominated a political novice as
their choice for the country's next prime minister.
Yields on 10-year Italian government bonds edged lower Tuesday,
narrowing their spread over Germany which widened quickly in recent
sessions, while the benchmark FTSE MIB index was up 0.6%.
Futures markets suggested U.S. stocks would extend gains, with
the S&P 500 and Dow Jones Industrial Average each poised to add
0.2% after closing at their highest since March.
Shares of U.S. industrial companies rallied on Wall Street on
Monday after Treasury Secretary Steven Mnuchin said the U.S. will
suspend its efforts to apply tariffs to $150 billion in Chinese
imports.
"Anything tied to economic growth and the business cycle is
going to be bid up in this environment where we get news that maybe
the 'trade war' is less of a risk than it was prior to the
comments," said Jason Ware, chief investment officer at Albion
Financial Group.
Recent news "suggests that things are on hold for now, as far as
this escalating into something that would be truly bad for the
global economy and therefore global markets," he added.
The U.S. and China also agreed on the broad outline of a deal
that would save imperiled Chinese telecom giant ZTE, The Wall
Street Journal reported.
The reaction in Asian markets was muted on Tuesday however, with
many markets closed for a holiday.
Small earlier gains in the yen pressured Japanese
multinationals, with the Nikkei edging down 0.2% from a two-month
high. The dollar settled Monday at its highest against the yen in
four months but was last down 0.1% against the Japanese
currency.
The broader WSJ Dollar Index was last down 0.2%.
--Giovanni Legorano contributed to this article.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
May 22, 2018 06:08 ET (10:08 GMT)
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