World Shares Rise on Hopes for US-China Truce, Fed Outlook
BANGKOK (AP) — Global markets advanced Thursday on hopes for a trade truce between the United States and China and the Federal Reserve’s hint at lower rates. The price of oil surged amid heightened tensions between Iran and the U.S.
Confirmation of a meeting between President Donald Trump and his counterpart Xi Jinping 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 Robert Lighthizer 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 the stalled negotiations remain uncertain, however, given the acrimony in recent weeks over who is to blame over the impasse.
“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.
Germany’s DAX added 0.8-percent to 12,410 while the CAC 40 in France gained 0.5-percent to 5,548. Britain’s FTSE 100 also picked up 0.5-percent to 7,441. Wall Street looked poised for gains, with the future contract for the Dow Jones Industrial Average up 0.8-percent to 26,753. The S&P 500 future picked up nearly 0.9-percent to 2,959.
The 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-percent to 2.5-percent and the signal of openness to lower rates later also reassured investors who have been worried the trade war could weigh on growth and 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.
In Asia, Tokyo’s Nikkei 225 index added 0.6-percentto 21,462.86 while the Hang Seng in Hong Kong surged 1.2-percent to 28,550.23. Shanghai was up 2.4-percent to 2,987.12 while Australia’s S&P ASX 200 picked up 0.6-percent to 6,687.40. India’s Sensex advanced 0.8-percent to 39,431.89.
ENERGY: Oil prices surged more than 3-percent after Iran’s Revolutionary Guard said it shot down a U.S. drone on Thursday over Iranian airspace. Two U.S. officials told The Associated Press that the downing happened over international airspace in the Strait of Hormuz. The drone shooting follows last week’s attack on two oil tankers near the Gulf of Oman. The U.S. blames Iran for the attack on the ships but Tehran denies it was involved. The attacks come against the backdrop of Trump’s decision to withdraw from Tehran’s nuclear deal a year ago.
Benchmark crude oil jumped $1.86 to $55.62 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil, the international standard, picked up $1.75 to $63.57 a barrel.
CURRENCIES: The dollar fell to 107.76 Japanese yen from 108.10 yen on Wednesday. The euro rose to $1.1308 from $1.1226.
By AP reporters Elaine Kurtenbach and Matt Ott