Stocks rise on optimism for trade talks, shutdown deal

Wednesday, February 13, 2019

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NEW YORK, United States (AFP) — Global stock markets rose Tuesday on optimism over US-China trade talks and signs of a deal to avoid another US Government shutdown.

Wall Street's rise followed European gains after news that senior US lawmakers had reached an agreement in principle to fund the Government.

US President Trump said he was not overly pleased with the bipartisan deal to offer nearly $1.4 billion for a barrier along the southern US frontier — far less than the US$5.7 billion he initially sought.

“I can't say I'm happy, I can't say I'm thrilled,” Trump said. But “I don't think you're going to see a shutdown.”

Speaking with reporters at the White House, Trump also said he would consider extending the deadline for a trade deal with China beyond March 1.

“If we're close to a deal, where we think we can make a real deal ... I could see myself letting that slide for a little while,” Trump said.

The comments came as the third round of trade negotiations were set to resume in Beijing to avert a doubling of US tariffs for US$200 billion in Chinese imports. Washington is demanding changes from Beijing on what it says are unfair commercial practices.

IG analyst Joshua Mahony said “a significant amount of global sentiment rests on Donald Trump's shoulders, with the ability to break the deadlock in talks with China and avert another government shutdown key for market direction”.

Investors have responded positively to reports that Trump wants to meet Xi Jinping “very soon”, just days after the US president had appeared to write off an imminent summit with his counterpart.

Wall Street soared during the day, with the benchmark Dow Jones Industrial Average and the Nasdaq both rising 1.5 per cent.

“US-China trade talks continue and that has boosted European stock markets,” said analyst David Madden at CMC Markets.

And the provisional deal by US lawmakers assuaged fears of a chaotic repeat of the recent 35-day partial US government shutdown -- the longest in the country's history.

Eurozone shares closed up to one percent higher but London lagged behind its peers as the Brexit-weary British pound clawed back some losses after dropping sharply Monday on dismal monthly GDP and manufacturing data.

The Tokyo stock market -- returning from Monday's public holiday -- closed 2.6 per cent higher, as traders played catch up and with exporters further benefitting from a resurgent US dollar.

Oil prices meanwhile rose nearly two per cent after OPEC said it sharply reduced production last month, with the world's top exporter Saudi Arabia slashing output.

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