Stock prices rose yesterday, with sentiment on both sides of the Atlantic helped by optimism that a trade deal between the US and China is taking shape at last, dealers said.
“The final full trading week of the year is ending with most markets in robustly bullish form,” said Chris Beauchamp, chief market analyst at IG.
Concerns that pen had not yet been put to paper on the pact were soothed by US Treasury Secretary Steven Mnuchin, who said a technical review was taking place and it would be signed in early January.
“China reaffirmed its pledge to purchase more than $40bn in US agriculture products, US Treasury Secretary Steven Mnuchin said he was confident of a signed US/China ‘phase one’ deal in January,” the Charles Schwab brokerage house said.
Wall Street extended Thursday’s record-breaking run, with all key European indices also well in positive territory by the close.
“This day last week it was announced that the US and China agreed on the terms of the first phase of the trade agreement, and the bulls are still dining out on that news,” said David Madden at CMC Markets UK.
London stocks largely lost out on the rally as a strong British pound weighed on the earnings outlook for multinationals.
Sterling got a shot in the arm from Britain’s freshly-elected parliament approving Prime Minister Boris Johnson’s divorce deal with the EU in a first vote.
The outcome in the lower House of Commons will help Johnson on his way towards meeting his campaign promise to “get Brexit done” on January 31.
The result provides markets with “some degree of certainty and confidence”, said analyst Joshua Mahony at trading firm IG.
Over recent months the pound had usually risen with every sign that Brexit may not be happening after all, but now jaded investors just want it over with quickly, analysts said.
“Despite Parliament passing the withdrawal agreement bill, edging the nation ever closer to Brexit, sterling was rather perky on Friday,” said Connor Campbell, an analyst at Spreadex.
“To be honest, the fact that the bill was successful might have been reassuring to the pound — the faster things move, the more time there might be to hash out a trade deal with the EU.”
Traders meanwhile set aside news that the British economy strengthened by more than expected in the third quarter of 2019 — despite looming Brexit.
Asian equities traded mixed with investors awaiting fresh catalysts to drive business, though with the China-US trade deal agreed and Christmas approaching many are in wind-down mode.
In London, the FTSE 100 closed up 0.1% to 7,582.48 points; Frankfurt — DAX 30 ended up 0.8% to 13,318.90 points and Paris — CAC 40 closed up 0.8% to 6,021.53 points yesterday.
from Gulf Times https://ift.tt/2EIcC9C
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