The Bull

Wednesday 19

December, 2018 4:30 PM



Stocks climb, oil falls as trade tensions ease

Stocks climb, oil falls as trade tensions ease

Stocks rose Tuesday as investors welcomed apparent moves by the United States and China to restart trade talks...

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01.08.2018 08:11 AM

Stocks rose Tuesday as investors welcomed apparent moves by the United States and China to restart trade talks while oil prices slid following an offer by US President Donald Trump to meet with his Iranian counterpart.

Investors were cheered by a Bloomberg News report that senior US and Chinese officials are seeking to restart negotiations to end an escalating trade war. 

That came after Treasury Secretary Steven Mnuchin last week said "some quiet conversations" were underway, and the US was ready to reopen talks "any time China is willing to seriously negotiate."

Solid earnings and economic data also supported the gains, analysts said.

US tariffs on another $16 billion (13.7 billion euros) of Chinese imports could go into effect in coming weeks, following levies on $34 billion imposed earlier this month, which prompted a tit-for-tat response from Beijing against US agricultural goods and other. 

That would be followed by US tariffs on another $200 billion in Chinese goods.

"Equity markets are in positive territory as trade tensions between the US and China are improving," said analyst David Madden at CMC Markets UK. 

"Traders took this as a positive sign and were encouraged to snap up stocks on the back of it."

The broad-based S&P 500 finished 0.5 percent higher, with industrial companies such as Caterpillar and Honeywell International posting strong gains.

In Europe, London stocks closed 0.6 percent higher, boosted by strong second-quarter BP results.

Paris added 0.4 percent and Frankfurt edged 0.1 percent higher.

$1 trillion Apple?

Meanwhile, oil prices dropped after Trump seemed to jettison bellicose threats against Iran on Monday, saying in a dramatic about-face that he was willing to meet the country's leaders without preconditions.

A volley of saber-rattling tweets had raised tensions in oil markets, which are already concerned about supplies as US sanctions coming back into force in November aim to choke off Iranian oil exports.

Supply fears were also eased by an OPEC survey showing that output had increased.

"Recently, traders have been fearful about future supply given the impending sanctions on Iran, but they are happy to dump oil in light of the OPEC news," said Madden at CMC Markets UK.     

The main international benchmark, Brent crude, fell 72 cents while the main US benchmark, WTI, dropped $1.37.

Earlier, Asian equities traded mixed as the Bank of Japan tweaked its monetary policy in a bid to make its massive easing program sustainable.

Tokyo's key Nikkei index closed marginally higher after the Bank of Japan revised its inflation forecasts down, while making minor changes to its ultra-loose monetary policy for the first time in nearly two years.

Technology shares, the biggest losers during a sharp three-day pullback in the US, rallied higher.

Facebook climbed 0.9 percent, Microsoft and Netflix both 0.7 percent.

Apple, which was set to report earnings later Tuesday, advanced 0.2 percent.

Key figures at 2030 GMT

New York - Dow Jones: UP 0.4 percent to 25,415.19 (close)

New York - S&P 500: UP 0.5 percent at 2,816.29 (close)

New York - Nasdaq: UP 0.6 percent at 7,675.19 (close)

London - FTSE 100: UP 0.6 percent at 7,748.76 (close)

Frankfurt - DAX 30: UP 0.1 percent at 12,805.50 (close)

Paris - CAC 40: UP 0.4 percent at 5,511.30 (close)

EURO STOXX 50: UP 0.5 percent at 3,529.40 (close)

Hong Kong - Hang Seng: DOWN 0.5 percent at 28,583.01 (close)

Shanghai - Composite: UP 0.3 percent at 2,876.40 (close)

Tokyo - Nikkei 225: UP less than 0.1 percent at 22,553.72 (close)

Euro/dollar: DOWN at $1.1697 from $1.1706 at 2100 GMT

Pound/dollar: DOWN at $1.3127 from $1.3133

Dollar/yen: UP at 111.81 yen from 111.04 yen

Oil - Brent Crude: DOWN 72 cents at $74.25 per barrel

Oil - West Texas Intermediate: DOWN $1.37 at $68.76 per barrel
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