Trade talk hopes fuel stocks rally

london — Global markets rallied on Wednesday on renewed optimism over talks on the China-US trade war, while oil prices were energised by fading supply and demand concerns.

Europe’s major stock markets followed Asian exchanges higher, with Frankfurt, Paris and London each adding at least one per cent as upbeat sentiment has this week sent investors back into equities, which are traditionally regarded as a riskier bet.

Wall Street also opened higher, adding to gains the previous day, with the Dow climbing 0.5 per cent in the first minute of trading. The S&P 500 opened higher by 5.59 points, or 0.22 percent, at 2,580.00. The Nasdaq Composite gained 26.06 points, or 0.38 percent, to 6,923.06 at the opening bell.

In Gulf region, Saudi equities climbed to a five-month high, while most major Gulf markets also gained as oil prices rose 2 per cent. The Saudi index rose 1.1 per cent, helped by bank and petrochemical stocks.

The Dubai index climbed 0.4 per cent, aided by property shares. The emirate’s largest listed developer, Emaar Properties, added 2 per cent and Dubai Investments rose 0.8 per cent. Abu Dhabi’s index was up 0.5 per cent, with the region’s largest bank, First Abu Dhabi Bank, rising 0.8 per cent, and Emirates Telecommunications edging up 0.4 per cent.

“There’s been further gains seen in risk assets... with stocks building on their recent gains while Brent crude has notched a three-week high back above the $60 a barrel level,” said analyst David Cheetham at brokerage XTB.

“A third day of US-China talks has provided greater hope of a deescalation in the trade tensions between the world’s two largest economies — with people close to (US President) Donald Trump suggesting he is getting more keen to strike a deal in order to boost the stock market.”

After taking a battering in December and suffering a shaky start to 2019, confidence is slowly returning to equity trading floors.

In Europe, Germany’s DAX added 1.1 per cent to 10,919 while the CAC 40 in France climbed 1.2 per cent to 4,832. Britain’s FTSE 100 jumped 1.1 per cent to 6,935.

Earlier in Asia, Japan’s Nikkei 225 index gained 1.1 per cent to 20,427.06 and Hong Kong’s Hang Seng jumped 2.3 per cent to 26,462.32. The Shanghai Composite index surged one per cent to 2,544.34 while South Korea’s Kospi advanced two per cent to 2,064.71.

In currency markets, the euro was up 0.1 per cent at $1.1456 while the dollar rose 0.1 per cent to 108.91 yen.