China's Moves on Foreign Investment Help Shore Up Markets
LONDON (AP) — Hopes that the U.S. and China will resolve their trade dispute as Beijing tweaked rules on foreign investment has helped shore up global stock markets on Friday.
Following a week dominated by Brexit uncertainty, traders focused on the annual session of China's ceremonial congress, which ended with Premier Li Keqiang pledging support for the slowing economy.
The congress endorsed a law aimed at defusing a tariff war with Washington by discouraging Chinese officials from pressuring companies to hand over technology. The measure is part of an investment law that aims to address complaints, particularly from the U.S., that China's system is rigged against foreign companies.
"This is designed to protect the rights and interests of foreign investors and attract more foreign investment," Li said.
The Shanghai Composite index jumped 1.0 percent to 3,021.75 and Hong Kong's Hang Seng added 0.6 percent to 29,012.26. The positive tone helped markets around the world.
"The Chinese government has finally taken steps to encourage foreign investment into the country, with a new law passed that is supposed to create a more level playing field between Chinese and international firms in the country," said Joshua Mahony, senior market analyst at IG.
In Europe, London's FTSE 100 climbed 0.7 percent to 7,233. Parliament voted, following weeks of political gridlock, to seek an extension from the European Union over the country's exit from the bloc to avoid a chaotic withdrawal on the scheduled exit date of March 29.
Power to approve or reject the extension lies with the EU, which has signaled that it will only allow a delay if Britain either approves a divorce deal or makes a fundamental shift in its approach to Brexit. Prime Minister Theresa May is likely to ask EU leaders for an extension at a March 21-22 summit of the bloc in Brussels after she tries again to win support from lawmakers for her deal after two resounding defeats.
"Any respite to the intensity of Brexit is going to be fleeting, for despite the lack of any major economic events today, we are now looking towards another meaningful vote next week," said IG's Mahony.
Elsewhere in Europe, Germany's DAX rose 0.9 percent to 11,693 while the CAC 40 in France was 0.9 percent higher too at 5,398. Wall Street looked set for gains, with Dow futures and the broader S&P 500 futures up 0.5 percent.
Earlier in Asia, Japan's Nikkei 225 index jumped 0.8 percent to 21,450.85 as the Bank of Japan ended a policy meeting by keeping its key interest rate at minus 0.1 percent, maintaining its stance of extreme monetary easing and lavish stimulus. And South Korea's Kospi advanced 1.0 percent to 2,176.11, while the S&P ASX 200 of Australia slipped 0.1 percent to 6,175.20.
CURRENCIES: The euro was flat at $1.1306 while the dollar declined 0.1 percent to 111.63 yen.
ENERGY: The price of U.S. crude oil fell 37 cents to $58.24 a barrel while the international standard, Brent, declined 50 cents to $66.73 a barrel.