Global rally rolls on as US and China ease nearer to deal
GLOBAL stocks capped off their strongest quarter in six years, rallying higher as bond market jitters calmed and the US and China closed in on a trade deal.
After the turbulent end to last year, stock markets have clawed back all their losses in the first quarter of 2019 despite growing recession worries.
The move higher this year has been fuelled by expectations that the slowdown will be offset by the end of the trade war and central banks slamming the brakes on their plans to normalise monetary policy.
The latest leg of the global rally was fuelled by signs of the US and China nearing an agreement to set aside their tariffs spat. Chinese state media revealed that the “two sides discussed the related text of an agreement and achieved new progress” as reports suggested that negotiators are poring over the details of a deal, preparing to present it to their respective leaders.
The global bond rally alleviated the pressure put on stocks in recent days. The part of the US Treasury yield that had triggered recession worries across markets pulled out of inversion territory for the first time in a week.
Easing trade tensions and bond worries helped global stocks end the quarter on the front foot. The MSCI
World Index jumped 11pc in the first three months of the year, its best performance since 2013.
The FTSE 100 gained 44.86 points to 7,279.19 yesterday, led higher by its mining stocks bouncing with metal prices. Copper mammoth Antofagasta rallied 33.6p to 966p, topping the FTSE 100, while peer Anglo American gained 61.3p to £20.54.
Elsewhere, waste management giant Renewi plunged as much as 21pc after cutting its dividend and warning on profits.
It told investors that no shipments of treated soil would be made from a Dutch plant in its next financial year amid extra scrutiny from regulators.
In November it revealed that the soil processed at its facility in Moerdijk was facing additional tests by Dutch authorities, forcing it to limit production.
Renewi clawed back its worst losses following the latest setback, closing 0.7p down at 23.5p.
CVS, the UK’S biggest veterinary group, leapt to a two-month high after it was boosted by the shortage of vets easing. Like-for-like sales growth accelerated to 4pc in its first half, while labour costs have dropped as vacancies were filled, reducing the need for expensive temporary staff. Its shares surged 83.5p to 600.5pc. Petra Diamonds
advanced 1.4p to 19.5p after finding a 425-carat stone at the South African mine where the world’s largest diamond was discovered. Building materials giant CRH jumped 80p to £23.75 as US rival Eagle Materials came under attack from activist investor Sachem Head, stoking break-up chatter. Finally, listed hedge fund Man Group rallied 5p to 135.8p after Credit Suisse initiated coverage with an “outperform” rating, arguing that it has lagged behind in the sector’s recovery in 2019.