European, US shares rise on hints of tariff relief; euro slightly gains

Oil near 3-1/2 year high; gold slips ahead of Fed minutes

NEW YORK, July 5, (Agencies): Stock markets in Europe and the US advanced on Thursday as reassuring economic data from Germany and a report that its big carmakers could be spared from US tariffs offset another gloomy session for Asia.

Shares of Mercedes-maker Daimler, BMW, Porsche and Volkswagen surged as much as 5 percent after reports of a US offer to suspend tariff threats on EUmade cars if the bloc lifts duties on US vehicles.

That fueled wider gains, with the European auto sector enjoying its best day in more than two years. The mood was also helped by a stronger-than-expected jump in German industrial orders after four months of declines.

On Wall Street, the Dow Jones Industrial Average rose 74.82 points, or 0.31 percent, to 24,249.64, the S&P 500 gained 8.18 points, or 0.30 percent, to 2,721.4 and the Nasdaq Composite added 25.23 points, or 0.34 percent, to 7,527.90.

MSCI’s gauge of stocks across the globe gained 0.23 percent.

The euro briefly topped $1.17 and bond yields rose after the brighter German data and a report that the ECB thinks markets are now too cautious on when it will raise euro zone interest rates next year.

Later in the day, traders will get the minutes from last month’s US Federal Reserve policy meeting, when it raised US rates for a second time this year.

MSCI’s broadest index of AsiaPacific shares outside Japan , which has dropped every day except three since mid-June, ended down 0.25 percent.

In commodities, Brent oil futures US crude rose 0.03 percent to $74.16 per barrel and Brent was last at $78.38, up 0.18 percent, a day after US President Donald Trump sent a tweet demanding that OPEC reduce prices for crude.

Brent had risen on Wednesday on a threat from an Iranian commander to disrupt oil shipments from neighboring states if Washington continued to press all countries to stop buying Iranian oil, and a drop in US crude inventories.

US

US stocks rose broadly on Thursday as the United States dialed back its stance on tariffs on European cars while moving to impose duties on Chinese goods worth $34 billion.

Shares of big US automakers General Motors and Ford rose but technology stocks led the gains, with chipmakers Qualcomm, Micron and Qorvo rising the most in tech indexes.

Part of those gains were driven by Micron, which forecast only a small hit from a temporary ban on some chip sales in China, also lifting the S&P technology index and the Philadelphia Semiconductor index.

Trade tensions between the two economies have roiled financial markets since early March, reducing the S&P 500’s gain to just about 2 percent this year.

At 13:06 ET, the Dow Jones Industrial Average was up 179.32 points, or 0.74 percent, at 24,354.14, the S&P 500 was up 20.55 points, or 0.76 percent, at 2,733.77 and the Nasdaq Composite was up 71.07 points, or 0.95 percent, at 7,573.74.

US markets were closed on Wednesday for the Fourth of July holiday, and Travis said the low volumes could make the markets more volatile.

The ADP National Employment Report showed private employers added 177,000 jobs in June, below Reuters’ consensus of an increase of 190,000. That comes ahead of the more comprehensive non-farm payroll report on Friday.

Advancing issues outnumbered decliners by a 2.18-to-1 ratio on the NYSE and by a 2.07-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and three new lows, while the Nasdaq recorded 63 new highs and 27 new lows.

Europe

European shares gained a boost on Thursday as hopes of a softening in US trade rhetoric lifted the car sector, though trading remained cautious ahead of a US deadline to impose tariffs on Chinese goods.

The pan-European STOXX 600 index closed with a 0.4 percent gain for its third straight positive session. Germany’s exporter-heavy DAX, meanwhile, was helped driven 1.2 percent higher by its carmakers.

European stocks have traded in a narrow range this week in anticipation of US tariffs on $34 billion of Chinese imports from Friday.

Sectors that have been hardest hit by the uncertainty over the trade rift made some headway on Thursday, with autos jumping 3.4 percent and basic resources rising 1.4 percent.

Germany’s BMW, Daimler, Porsche and Volkswagen were among the biggest STOXX risers, closing up as much as 4 percent after a report about a US offer to suspend threats to impose tariffs on cars imported from the European Union.

Shares in carmakers have struggled in 2018 and remain 7.8 percent down for the year, among the worstperforming sectors in Europe.

Europe’s technology sector, which came under pressure in the previous session after a Chinese court banned US company Micron from selling some of its chips in China, regained ground with a 1.2 percent rise.

Elsewhere, company updates were in focus. Shares in France’s Sodexo were the biggest STOXX 600 gainers, up 8.7 percent after the food services and facilities management group maintained its full-year goals despite posting slower thirdquarter sales growth.

SBM Offshore was the biggest faller, down 7.2 percent after a Brazilian court ordered Petrobras to provisionally withhold some payments to SBM to ensure the Dutch company paid whatever penalties it received in a corruption case.

Asia

Asian stocks fell Thursday as investors fretted over US-China tariffs due to kick in within hours and which threaten to plunge the world’s top two economies into an all-out trade war.

Hong Kong shares fell 0.2 percent, while Shanghai stocks closed at a two-year low after shedding 0.9 percent.

The yuan lost ground against the dollar despite central bank chief Yi Gang’s pledge earlier this week to keep the exchange rate stable and avoid using the currency as a weapon in any trade war.

Elsewhere, Tokyo slipped 0.8 per cent, while Seoul, Taipei and Bangkok also posted losses.

Energy and financial stocks were among the biggest losers in Asia. Shares in HKICIM — the Hong Kong-listed subsidiary of Chinese conglomerate HNA Group whose cofounder died after falling off a wall in France Tuesday — fell 3.7 percent.

■ Key figures around 0820 GMT Hong Kong - Hang Seng: DOWN 0.2 percent at 28,182.09 (close)

Tokyo - Nikkei 225: DOWN 0.8 percent at 21,546.99 (close)

Shanghai - Composite: DOWN 0.9 percent at 2,733.88 (close)

Dollar/yen: UP at 110.65 yen from 110.54 yen

Oil

Oil edged lower on Thursday but still stood not far off its highest in 3-1/2 years, boosted by potential disruptions to flows from Iran and the Middle East despite a fresh demand from US President Donald Trump that OPEC cut prices.

Brent crude futures were at $77.99 a barrel at 1345 GMT, down 25 cents. US crude futures were also down 25 cents at $73.89, not far from Tuesday’s 3-1/2-year high above $75.

Trump again on Wednesday accused the Organization of the Petroleum Exporting Countries of driving up fuel prices.

“The OPEC Monopoly must remember that gas prices are up & they are doing little to help,” Trump wrote on his personal Twitter account. “If anything, they are driving prices higher as the United States defends many of their members for very little $’s.”

“This must be a two way street,” he wrote, adding in block capitals, “REDUCE PRICING NOW!”

OPEC together with a group of non-OPEC producers led by Russia started to withhold output in 2017 to prop up the market.

Recent price rises have also been spurred by a US announcement that it plans to reintroduce sanctions against Iran from November, targeting oil exports.

Gold

Gold drifted lower on Thursday despite a weaker dollar as investors worried that US Federal Reserve minutes would highlight the prospect of further rate hikes.

Spot gold was down 0.2 percent at $1,254.31 an ounce by 1345 GMT. The metal touched a one-week high of $1,261.10 in the prior session and had gained over $20 from Tuesday’s low of $1,237.32, its weakest since Dec. 12.

US gold futures for August delivery were up 0.1 percent at $1,255.10 an ounce.

The dollar index fell to its lowest level in more than a week while the euro climbed half a percent to near three-week highs following strong German data.

“Gold is not making huge headway even though we’re in a slightly weaker dollar environment. The market is very much in a wait-andsee mode ahead of the Fed minutes,” said Jonathan Butler, commodities analyst at Mitsubishi in London.

The minutes of the US central bank’s June meeting are scheduled to be published at 2 pm EDT (1800 GMT). During the discussion, the Fed had projected two more rate hikes in 2018 for a total of four.

The minutes may point to concerns about inflation or that members want monetary policy to keep pace with fairly strong economic growth, Butler said.

“Those sorts of sentiments when they come out could weigh on gold and could give the dollar somewhat of a boost.”