Stock markets mixed as traders await details from US-China talks
Asian shares had a mixed time last night as traders held back from making big moves until there is more clarity over the US-China trade negotiations.
European stock markets have opened broadly higher this morning following a subdued day yesterday.
Read more: Donald Trump defends China trade war but says a deal ‘close’
China’s Shanghai composite stock index rose 0.85 per cent last night, while Hong Kong’s Hang Seng index climbed 1.47 per cent despite another day of violence rocking the city.
Japan’s Nikkei 225 fell 0.53 per cent, however, while Korea’s Kospi slipped 0.34 per cent and Singapore’s STI dropped 0.66 per cent.
In Europe, the UK’s FTSE 100 rose 0.53 per cent shortly after the bell, the German Dax climbed 0.36 per cent and France’s CAC 40 was up 0.16 per cent.
The FTSE was lifted by technology firm Halma’s 9.3 per cent share rise.
China’s decision to cut a key short-term interest rate yesterday to try to spur growth appears to have boosted some financial groups such as Standard Life Aberdeen and Hargreaves Lansdown.
Britain’s FTSE 250 was 0.6 per cent higher, boosted by a 3.88 per cent rise in Cobham’s shares after a takeover deal for the aerospace firm was approved.
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The flow of information coming out of the US-China tariff war talks has recently slowed. CNBC last night reported that the mood in Beijing was pessimistic.
Yet there have been some positive signs. US companies have been allowed to keep doing business with giant Chinese tech firm Huawei, for example.
“Overall, we think the chance of a complete breakdown in talks is now lower, and the chance of a positive resolution – potentially including a rollback of tariffs – is higher,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Political pressure ahead of the 2020 [US presidential] elections is rising, and a workable agreement would enable President [Donald] Trump to ‘declare victory” ahead of the vote,” he said.
“Meanwhile, monetary policy and fundamentals are also now more supportive and we have adopted a neutral stance overall on equities.”
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The Hong Kong stock index’s solid rise came despite chaotic scenes in the city yesterday. Police laid siege to and attempted to storm a major university in which student protesters were holed up.
Hong Kong’s economy has been hard-hit by the protests which have rocked the city since April. The city fell into its first recession in a decade in the third quarter, with the economy shrinking by 3.2 per cent.