US-China trade hopes lift stocks

Hopes of a U.S.-China trade deal turned world stock markets and other risk assets higher on Friday, though an escalating wave of global protests from Hong Kong to Chile left some deep scars. Europe’s main bourses and Wall Street futures followed Asia higher after White House economic adviser Larry Kudlow said on Thursday that the United States and China were nearing a deal and talking every day.

Emerging market stocks were down 1.7% for the week, after a violent escalation of prodemocracy demonstrations in Hong Kong had left the Hang Seng down 4.7%, its worst weekly performance in four months. Chinese bluechip shares ended the day down 0.75% and 2.4% for the week, which was their biggest fall since August. Fierce anti-government protests in Chile means its currency could have its worst week since 2011 with a 7% plunge.

Global sentiment has been buffeted in recent weeks by conflicting assessments of progress in talks between the United States and China aimed at ending their 16-month-long trade war. China’s commerce ministry said the two countries are holding “in-depth” discussions on the first-phase trade pact, and that cancelling tariffs is an important condition to reaching a deal.

China has also ended a nearly five-year ban on imports of U.S. poultry meat, which the U.S. Trade Representative said would lead to more than $1 billion in annual shipments to China. Those developments followed comments from officials from both countries last week that they had a deal to roll back tariffs, only to have U.S. President Donald Trump deny that any such deal had been agreed to.

In commodity markets, U.S. crude prices seesawed after sliding Thursday on rising U.S. crude inventories. U.S. West Texas Intermediate crude stumbled from $57.02 to $56.67 a barrel.

Global benchmark Brent crude slipped 0.5% to just below $62 per barrel on the way to a modest weekly fall. Gold retreated from gains that had been prompted by trade uncertainty. Spot gold was last trading at $1,463.90 per ounce, down 0.48%. This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000.

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