US stocks surge on trade talk plans, pound strengthens more
AFP – Global stocks mostly rose Thursday following news that the United States and China will resume high-level trade talks in October, although London shares fell as the pound continued to strengthen on the decreasing odds of a no-deal Brexit.
Wall Street equities were especially buoyant, with major indices winning more than one percent, after China’s commerce ministry said Vice Premier Liu He, Beijing’s point man on trade, agreed to October talks in a call with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.
The announcement came less than a week after both Beijing and Washington enacted new tariff measures on each other. The grinding dispute has hung over markets for more than a year.
US stocks were also lifted by data showing showed increased private-sector hiring in August and better-than-expected services sector activity.
On Friday, the Labor Department releases the closely watched government jobs report for August.
Bourses in Paris, Frankfurt and Tokyo also rose, but London retreated as Sterling continued to strengthen.
The British pound topped $1.23, hitting a one-month peak as the prospect of a “no deal” Brexit seemed to fade after a series of parliamentary votes tore up Prime Minister Boris Johnson’s hardline stance.
Johnson himself remained defiant, saying he would “rather be dead in a ditch” than delay Brexit beyond next month, as he urged lawmakers who oppose his plan to support an early election.
MPs in the House of Commons this week passed a bill that could stop Johnson taking Britain out of the European Union without a divorce deal with Brussels.
They also rejected his call for a snap election to resolve the political deadlock that has characterized the past three years since the 2016 referendum vote for Brexit.
The vote left Johnson in limbo, his Brexit plan in tatters but with no way out after his parliamentary majority was destroyed by a Conservative party rebellion over the issue.
As a result, his government announced it would try again to force an election with a House of Commons vote on Monday, and he challenged the opposition Labour party to back it.
“The pound has been behaving as a tidy barometer of the odds of a no-deal Brexit,” Rabobank analyst Jane Foley told AFP.
“The pound is clearly not out of the woods with political uncertainty still at very elevated levels — but the risk of a disorderly Brexit next month at least looks set to be pushed off the table,” Foley added.
– Key figures around 2040 GMT –
New York – Dow: UP 1.4 percent at 26,728.15 (close)
New York – S&P 500: UP 1.3 percent at 2,976.00 (close)
New York – Nasdaq: UP 1.8 percent at 8,116.83 (close)
London – FTSE 100: DOWN 0.6 percent at 7,271.17 (close)
Frankfurt – DAX 30: UP 0.9 percent at 12,126.78 (close)
Paris – CAC 40: UP 1.1 percent at 5,593.37 (close)
EURO STOXX 50: UP 1.0 percent at 3,484.70 (close)
Tokyo – Nikkei 225: UP 2.1 percent at 21,085.94 (close)
Hong Kong – Hang Seng: FLAT at 26,515.53 (close)
Shanghai – Composite: UP 1.0 percent at 2,985.86 (close)
Pound/dollar: UP at $1.2328 from $1.2253 at 2100 GMT
Euro/pound: DOWN at 89.51 pence from 90.06 pence
Euro/dollar: UP at $1.1036 from $1.1035
Dollar/yen: UP at 106.94 yen from 106.39 yen
Brent North Sea crude: UP 0.4% at $60.95 per barrel
West Texas Intermediate: UP 0.1% at $56.30 per barrel