Stocks Climb as China Soars on Optimism Over Trade
By Eddie van der Walt
(Bloomberg) -- Stocks in Europe and Asia advanced alongside futures on U.S. equities after U.S. President Donald Trump postponed the date for boosting tariffs on Chinese imports 川普延後加關稅, in the latest sign of progress in the trade talks. Bonds fell and the dollar retreated.
The headlines boosted carmakers and miners, fueling an advance in the Stoxx Europe 600 Index, with contracts on the Dow, Nasdaq and S&P all climbing. And in Asia, the Shanghai Stock Exchange Composite Index rallied the most since 2015 and the yuan strengthened after Trump said he will delay the March 1 trade deadline, and as comments from China President Xi Jinping suggested top officials will focus on growth rather than cracking down on leverage.
Emerging market currencies and shares advanced despite China’s state-run Xinhua news agency later publishing a commentary saying talks will be harder at the final stage. Treasuries and core European bonds slipped.
“This is a sigh of relief,” Ben Emons, managing director for global macro strategy at Medley Global Advisors, told Bloomberg TV. “Markets will still keep a level of caution, but this news is encouraging.”
The official delay from the U.S. may give fresh impetus to extend a global rally in equities that was being tested amid an uncertain future on global trade and forecasts for global economic growth to ebb. Also in focus this week will be a hearing from Federal Reserve Chairman Jerome Powell, where investors will get the latest read on monetary policy.
Trump said the trade talks were productive. “The U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues,” he said in a Twitter posting on Sunday evening.
Read how emerging markets are beholden to the yuan’s fate as trade deadline looms
Elsewhere, Brent held above $67 a barrel and gold was steady, while copper extended gains. The pound was little changed against the euro as U.K. Prime Minister Theresa May pushed back the deadline for Parliament to vote on her Brexit deal.