World stocks up on US-China trade talks

singapore — Many global markets climbed Thursday following a report that the US has proposed a new round of trade negotiations with China before going ahead with plans to slap tariffs on $200 billion or more in Chinese goods.

Investors were also keeping an eye on European Central Bank and Bank of England meetings, where no policy changes are expected. In Europe, France’s CAC 40 gained 0.3 per cent in early trading to 5,348.25 while the DAX in Germany added 0.5 per cent to 12,096.49.

Britain’s FTSE 100 dropped 0.2 per cent to 7,295.59. Wall Street was set for a positive open. Dow futures added 0.1 per cent to 26,047.00 and S&P 500 futures also gained 0.1 per cent to 2,891.30. Japan’s benchmark Nikkei 225 added 1.0 per cent to 22,821.32, and the Kospi in South Korea rose 0.1 per cent to 2,286.23. Hong Kong’s Hang Seng index jumped 2.5 per cent to 27,014.49.

The Shanghai Composite index rallied 1.2 per cent to 2,686.58. Australia’s S&P/ASX 200 shed 0.8 per cent to 6,128.70. Stocks were higher in Taiwan and Southeast Asia. According to the Wall Street Journal, US officials recently proposed a new round of trade negotiations with China. That would give the Chinese government another chance to address US concerns before the Trump administration imposes bigger tariffs on goods imported from China, the report said.

The two countries have already placed new taxes on $50 billion in imports, and the US is threatening higher tariffs on $200 billion in goods and possibly more. China has vowed to retaliate and has put off accepting license applications from American companies hoping to operate in the country. It has also asked to be allowed to impose sanctions against the United States for failing to abide by a World Trade Organisation ruling on antidumping measures. The case centers on US trade limits on Chinese products that the US says are sold below market value.

“The shifting of the balance of trade negotiations away from the US and towards the rest of the world and particularly China is starting to pull up markets,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said in an interview.

Apple unveiled new iPhones with larger screens on Wednesday. The company also said new Apple Watches will have larger screens and new health-monitoring features. Its stocks, which tend to trade lower on the days it announces new products, fell 1.2 per cent to $221.07 on Wednesday. Apple is up 31 per cent in 2018.

The shifting of the balance of trade negotiations away from the US and towards the rest of the world and particularly China is starting to pull up markets

Michael McCarthy, Chief market strategist, CMC Markets