Stock Markets Rise, Buoyed by Trade Talk Hopes


Stock markets rose Tuesday as investors bet on China and the U.S. reaching a mini trade deal despite a report saying Beijing was concerned about the chances of an agreement.

The U.S. and China were "now widely seen as de-escalating tensions with a phase one agreement", said David Cheetham, chief market analyst at trading group XTB.

World equities have been underpinned in recent weeks on optimism that the world's top two economies will eventually hammer out a mini trade deal as part of a wider agreement.

Frankfurt and London were the standouts in Europe, rising more than 0.5 percent, while Wall Street showed more modest gains at the opening bell.

Despite trade optimism, investors are not forgetting about bumps in the road, the latest being a CNBC report that China was pessimistic about the chances of a pact because U.S. President Donald Trump is not in favor of rolling back tariffs.

Trump last week denied claims by Beijing that the two sides had put in place a plan to remove levies as the talks progress.

The report again highlighted the fragile nature of the negotiations.

- Making sense of it all -

"Investors have little option but to keep pace with the rapid shifts on the US-China phase-one deal, attempting to make sense of the many comments -- official and from press 'sources' -- on whether a rollback was now genuinely on the table," said Stephen Innes at AxiTrader. "Ultimately they remain hostage to these developments." 

Earlier, Hong Kong's main stocks index extended Monday's rally with another surge but continuing protests in parts of the city -- particularly a violent standoff at a university -- remained a source of worry.

The gains come as the widespread protests that hammered the city's transport network last week appear to have become less disruptive over the past two days.

Oil prices extended losses.

The pound retreated after strong gains Monday seen on expectations UK Prime Minister Boris Johnson's ruling Conservative party will win next month's general election with a healthy majority, helping him to push through his Brexit deal. 

- Key figures around 1435 GMT - 

London - FTSE 100: UP 1.0 percent at 7,375.00 points

Frankfurt - DAX 30: UP 0.7 percent at 13,294.58

Paris - CAC 40: FLAT at 5,928.53

EURO STOXX 50: UP 0.2 percent at 3,711.40

New York - Dow: UP 0.1 percent at 28,053.74

Tokyo - Nikkei 225: DOWN 0.5 percent at 23,292.65 (close)

Hong Kong - Hang Seng: UP 1.6 percent at 27,093.80 (close)

Shanghai - Composite: UP 0.9 percent at 2,933.99 (close)

Euro/dollar: UP at $1.1077 from $1.1072 at 2100 GMT

Pound/dollar: DOWN at $1.2943 from $1.2953

Euro/pound: UP at 85.60 pence from 85.48 pence

Dollar/yen: DOWN at 108.67 yen from 108.68 yen

Brent North Sea crude: DOWN 1.3 percent at $61.62 per barrel

West Texas Intermediate: DOWN 1.6 percent at $56.21 per barrel

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