European shares reach threemonth high

Optimism about U.S.-China trade talks and bumper earnings lifted European shares to a threemonth high on Thursday, though news that Germany only dodged recession by the narrowest of margins left the euro feeling unloved.

Markets were generally in a cautious mood as investors hung on for any hint of progress in the tariff talks amid reports the White House could extend the deadline for a deal.

Stocks extended gains regardless. Strong results from Nestle, drugmaker AstraZeneca and plane giant Airbus lifted the panEuropean STOXX 600 0.5 percent to put it on course for its fourth day of gains and best week since early November.

The euro did not share the feeling however. It struggled near a three-month low as data showed Germany’s economy stalled in the fourth quarter, with fallout from global trade disputes and Brexit threatening to derail a decadelong expansion in Europe’s economic powerhouse.

On China, President Donald Trump said on Wednesday that trade talks were “going along very well” and, with Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer in China, investors had been daring to hope for good news.

Expectations have been disappointed before, the reaction in Asian share markets was guarded. Shanghai blue chips closed broadly flat, having jumped 2 percent on Wednesday to levels last seen in late September.

MSCI’s broadest index of AsiaPacific shares outside Japan eased 0.15 percent, though that was off a peak last seen in early October. Japan’s Nikkei touched its highest this year as a weakening yen boosted export stocks.

In commodity markets, spot gold edged up 0.18 percent to $1,308.56 per ounce. Oil prices found support as top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper output cut. U.S. crude was up 56 cents, or 1 percent, at $54.42 a barrel, while Brent crude futures rose 97 cents to $64.50, its highest since November.