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Monday May 17th, 2021
International news

US stocks rally on Huawei reprieve as pound gyrates on Brexit news

AFP – Global stocks rallied Tuesday as the United States took a step away from imposing crushing restrictions on Chinese telecom company Huawei, while the pound gyrated on fresh Brexit drama.

Wall Street stocks gained ground following two straight losing sessions, with tech companies leading after the US Commerce Department announced it would delay implementation of a ban on Huawei for 90 days to allow companies to adjust their operations and avoid sudden disruption.

Nate Thooft, senior portfolio manager of Manulife Asset Management, said Huawei seems to be a "bargaining chip" in the broader US-China trade talks, raising concerns China could respond by targeting US tech companies.

Many analysts expect more volatility in markets ahead.

"We don’t know what’s going to happen on trade," Thooft said.

"Our baseline remains the view that basically there is going to be a trade deal. But the timeline is very questionable on when it’s going to happen."

After falling on Monday, large tech companies such as Apple and Google parent Alphabet pushed higher, lifting the Nasdaq by 1.1 percent.

European bourses also rallied with the United States, while Asian markets were mixed.

The pound, meanwhile initially shot higher in anticipation of British Prime Minister Theresa May’s latest Brexit announcement.

May, who has already said she will leave office next month, promised to give lawmakers a chance to set a confirmatory referendum on whatever version of Brexit they end up approving in the weeks or months to come.

But the pound later pulled back after critics attacked it as a rehash of earlier May efforts that have made little headway politically.

"The market was all geared up to hear something new," said Boris Schlossberg of BK Asset Management, adding said May’s decision to link a second vote to her Brexit plan meant the announcement was a "warmed-over" version of a rejected idea.

"There was definitely a misreading of the headline first from the market," said Erik Nelson, a currency strategist at Wells Fargo.

"It seems that nothing has really changed with regards to Brexit and it is more likely today than it did yesterday that Prime Minister may well fail."

– Key figures at 2100 GMT –

New York – Dow: UP 0.8 percent at 25,877.33 (close)

New York – S&P 500: UP 0.9 percent at 2,864.36 (close)

New York – Nasdaq: UP 1.1 percent at 7,785.72 (close)

London – FTSE 100: UP 0.3 percent at 7,328.92 (close)

Frankfurt – DAX 30: UP 0.9 percent at 12,143.47 (close)

Paris – CAC 40: UP 0.5 percent at 5,385.46 (close)

EURO STOXX 50: UP 0.5 percent at 3,386.51 (close)

Tokyo – Nikkei 225: DOWN 0.1 percent at 21,272.45 (close)

Hong Kong – Hang Seng: DOWN 0.5 percent at 27,657.24 (close)

Shanghai – Composite: UP 1.2 percent at 2,905.97 (close)

Pound/dollar: DOWN at $1.2706 from $1.2726 at 2100 GMT

Euro/pound: UP at 87.84 pence from 87.76

Euro/dollar: DOWN $1.1161 from $1.1166

Dollar/yen: UP at 110.50 yen from 110.06 yen

Oil – Brent Crude: UP 21 cents at $72.18 per barrel

Oil – West Texas Intermediate: DOWN 11 cents at $62.99 per barrel

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