Global stock markets rallied yesterday as optimism from a forecast-busting US jobs report lingered and confidence grew that China and the United States will finally sign off on a mini trade pact.
Investor sentiment was also lifted by British Airways owner IAG, which agreed to buy Spain’s Air Europa for €1.0bn ($1.2bn), sending its share price up 1.2% in London.
European markets were “starting off the week in positive fashion, with stocks following their Asian counterparts higher amid optimism over an upside surprise to Friday’s jobs report and US-China talks,” said IG analyst Joshua Mahoney.
London’s FTSE 100 closed 0.9% up at 7,369.69 points, Frankfurt’s DAX 30 ended 1.4% higher at 13,136.28 points and Paris’ CAC 40 finished adding 1.1% at 5,824.30 points, while the EURO STOXX 50 gained 1.1% at 3,662.81 points.
Wall Street stocks also pushed higher, striking new records, building on a strong performance on Friday after the Labour Department said the US created 128,000 net new jobs in October, far surpassing the 80,000 expected, while the figure for the previous two months was also revised upwards.
The reading came days after data showed the world’s top economy slowed slightly in July-September but not as much as projected, which suggested it is stabilising.
“The bullish sentiment on Wall Street has been underlined by the fresh all-time highs achieved in the Dow Jones, S&P 500 and NASDAQ 100,” said market analyst David Madden at CMC Markets UK.
“The US-China trading relationship is heading in the right direction, which is driving the rally,” he added.
Earlier in Asia, Hong Kong, Seoul, Bangkok and Taipei each piled on more than 1% while Shanghai jumped 0.6%.
In Europe, Frankfurt, Paris and Milan enjoyed gains of more than 1%.
The upbeat mood was enhanced by comments from Chinese Vice Premier Liu He that indicated trade talks with Washington were on track.
Liu said he had spoken on Friday to US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, with both sides saying the talks were “constructive”. Progress on the discussions has provided support to equities for the past few weeks, with speculation that Donald Trump and Xi Jinping will meet this month to sign off on the mini pact.
While the agreement would only be the first part of a wider deal, it would be a major step after more than a year of a trade war that has undermined the world economy.
However, National Australia Bank’s Rodrigo Catril warned there were still important issues to address.
“As much as the US-China trade updates continue to point to a phase one deal looking like a certainty, the contentious issues on whether the US will cancel the planned December tariffs and remove some of the current tariffs in line with China’s demands remains an unknown and if the issue is not resolved then a deal could easily collapse,” he said in a note.
from Gulf Times https://ift.tt/2WDZpHk
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