World Stocks Higher 06/20 06:43
World shares advanced on Thursday on hopes that a meeting between President
Donald Trump and his counterpart Xi Jinping next week might bring about a truce
in trade tensions.
BANGKOK (AP) -- World shares advanced on Thursday on hopes that a meeting
between President Donald Trump and his counterpart Xi Jinping next week might
bring about a truce in trade tensions.
Germany's DAX added 1.1% to 12,437.98 while the CAC 40 in France gained 0.8%
to 5,562.51. Britain's FTSE 100 rose 0.3% to 7,427.57. Wall Street looked
poised for gains, with the future contract for the Dow Jones Industrial Average
up 0.7% to 26,723.00. The S&P 500 future picked up 0.8% to 2,955.80.
Confirmation that Trump and Xi will meet at the Group of 20 summit in Osaka
next week has raised hopes for a political compromise on their tariffs war.
U.S. Trade Representative told a congressional hearing that he plans to
speak with China's top trade envoy, Vice Premier Liu He, soon and also to meet
with him in Osaka.
China's Commerce Ministry confirmed Thursday that the trade negotiators were
holding talks in preparation for the meeting. Prospects for a breakthrough in
stalled negotiations remain uncertain, however, given the acrimony in recent
weeks over who is to blame over the impasse.
Tokyo's Nikkei 225 index added 0.6% to 21,462.86 while the Hang Seng in Hong
Kong surged 1.2% to 28,550.23. Shanghai was up 2.4% to 2,987.12 while
Australia's S&P ASX 200 picked up 0.6% to 6,687.40. India's Sensex advanced
0.8% to 39,431.89.
"The only uncertainty out there relative to six or seven months ago is the
U.S.-China trade situation, and for now things are looking up," said Michael
Every of Rabobank.
The widely expected decision Wednesday by the U.S. central bank's
policymakers to leave the Fed's benchmark interest rate unchanged in a range of
2.25%-2.5% and the signal of openness to lower rates later reassured investors
who have been worried the trade war between Washington and Beijing could weigh
on global economic growth, and by extension, corporate profits.
"For now, equities seem to be running with the notion that this is all a
good news story," Robert Carnell of ING said in a commentary.
The reaction to the Fed's midafternoon statement was more pronounced in the
bond market, where the yield on the 10-year Treasury note slid to 2.03%, its
lowest level since November 2016. The move signals that bond traders see an
increased likelihood that the Fed will lower rates. Investors are betting on at
least one interest rate cut this year, possibly as early as July.
The 10-year Treasury yield has been declining steadily since hitting a high
of 3.23% last November. It was at 2.00% Thursday, down from 2.03% late
Benchmark crude oil jumped $1.52 to $55.49 per barrel in electronic trading
on the New York Mercantile Exchange. It lost 14 cents to $53.97 a barrel on
Wednesday. Brent crude oil, the international standard, picked up $1.44 to
$63.26 a barrel.
The dollar fell to 107.76 Japanese yen from 108.10 yen on Wednesday. The
euro rose to $1.1291 from $1.1226.