US stocks boosted by report of possible lifting of China tariffs
Jan 18, 2019 05:54 AM GMT+0530 | 0 Comment(s)
New York, United States | AFP | Wall Street stocks climbed for a third straight session on Thursday following a report the US could lift sanctions on China while leading bourses in Europe and Asia retreated.
US stocks were little changed through early afternoon but suddenly jumped higher after The Wall Street Journal reported Treasury Secretary Steven Mnuchin had proposed lifting some or all tariffs on China as a way to reassure markets and bolster the odds of a bigger trade deal.
But the article described the idea as part of a policy debate between Mnuchin and US Trade Representative Robert Lighthizer, who is more hawkish on China.
The Treasury Department told AFP on Thursday that no formal recommendation had been made by either Mnuchin or Lighthizer in the talks, which were "nowhere near completion."
Among those shares that got a boost, Boeing, Caterpillar and General Motors gained at least one percent. All three depend on China for a significant portion of sales.
Worries about the US-China trade war had been a headwind earlier in the US session and a factor in down sessions across major European and Asian markets following reports that US officials were carrying out a criminal probe into Chinese tech giant Huawei and could soon bring indictments over allegations of theft of trade secrets from its American business partners.
US lawmakers have also introduced a bill to ban the export of American parts and components to Chinese telecom companies that are in violation of US export control or sanctions laws -- with Huawei and fellow Chinese firm ZTE the likely targets.
- Pound rises -
Meanwhile, in Britain, Prime Minister Theresa May scrambled to put together a new Brexit strategy with cross-party talks after MPs sparked political turmoil by rejecting her previous agreement with the EU.
May reached out to rival parties shortly after surviving a no-confidence vote on Wednesday, hoping to hammer out a Brexit fix that she could present to parliament next week.
Despite the impasse, the pound rose again against both the dollar and the euro.
"The market assumes that at very least the status quo will prevail and at minimum Article 50 will be delayed until a more palatable solution is found," said BK Asset Management's Boris Schlossberg.
"But the state of uncertainty is taking its toll on UK business and there is little doubt that any and all investment planning has come to a grinding halt," he added.