Stock markets rise amid Trump-Kim summit, oil flat
AFP – Global equity markets rose Monday as traders brushed off a chaotic Group of Seven meeting to focus instead on US President Donald Trump’s upcoming summit with North Korean leader Kim Jong Un.
Investors were also on tenterhooks ahead of this week’s European Central Bank and Federal Reserve interest rate decisions.
Stock prices mostly rose despite a contentious G7 summit of leading economic powers in Canada which failed to end concerns of a global trade war, dealers said.
"The weekend G7 meeting in Canada didn’t disappoint those expecting a dysfunctional atmosphere," said analysts at Charles Schwab.
Trump pulled out of endorsing a joint communique after the G7 meet finished on Saturday, accusing Canadian Prime Minister and summit chairman Justin Trudeau of dishonesty.
Analysts varied in their assessment of the implications of the breakdown.
"It is probably more bluster than anything else," said Bill Lynch, director of investment at Hinsdale Associates. "It will probably blow over and end up not having much effect on our economy going forward."
– Euro promise lifts Milan –
European equities won support after new Italian Finance Minister Giovanni Tria emphatically ruled out an Italian exit from the single currency, with the Milan stock market up ell over three percent.
"European markets are rallying mainly because investors are less concerned about Italy as the Italian finance minister has assured that the country is committed to bring its debt lower," said Naeem Aslam, analyst at trading firm Think Markets.
But Capital Economics analyst Ingvild Borgen Gjerde warned that markets might be failing to take political risk seriously enough, partly because of encouraging signs on the state of the US economy.
"We think that the markets are complacent about the political outlook and don’t expect the good news on the US economy to last either," she said.
– Rate decisions coming up –
In Asia, the focus was squarely on Tuesday’s historic nuclear summit between Donald Trump and Kim Jong Un in Singapore.
"Barring any surprises the talks should mark a positive step in terms of easing geopolitical tensions in the region," said ADS Securities analyst Konstantinos Anthis.
But Lynch of Hinsdale Associates said expectations for the talks were "fairly low" and that any agreement would be a "long, drawn-out process."
This week is also expected to see the Federal Reserve lift interest rates again and traders will be poring over the Fed’s public remarks and statements by Chairman Jerome Powell for clues about future moves.
That will be followed by the ECB’s gathering, which could see policymakers discuss winding down its crisis-era stimulus program.
– Key figures around 2100 GMT –
New York – Dow Jones: UP less than 0.1 percent at 25,322.31 (close)
New York – S&P 500: UP 0.1 percent at 2,782.00 (close)
New York – Nasdaq: UP 0.2 percent at 7,659.93 (close)
London – FTSE 100: UP 0.7 percent at 7,737.43 (close)
Paris – CAC 40: UP 0.4 percent at 5,473.91 (close)
Frankfurt – DAX 30: UP 0.6 percent at 12,842.91 (close)
Milan – FTSE MIB: UP 3.4 percent at 22,086 (close)
Madrid: IBEX 35: UP 1.6 percent at 9,898 (close)
EURO STOXX 50: UP 1.1 percent at 3,483.46 (close)
Tokyo – Nikkei 225: UP 0.5 percent at 22,804.04 (close)
Hong Kong – Hang Seng: UP 0.3 percent at 31,063.70 (close)
Shanghai – Composite: DOWN 0.5 percent at 3,052.78 (close)
Euro/dollar: UP at $1.1785 from $1.1775 at 2100 GMT
Pound/dollar: DOWN at $1.3378 from $1.3416
Dollar/yen: UP at 110.02 yen from 109.32 yen
Oil – Brent Crude: FLAT at $76.46 per barrel
Oil – West Texas Intermediate: UP 36 cents at $66.10 per barrel