• Wed. May 17th, 2023

World markets buoyed by growing trade optimism

London: European and Asian markets extended gains Tuesday, after a record lead from Wall Street, as trade optimism gave another lift to sentiment.

Global bourses had already soared on Monday on expectations that economic superpowers China and the United States were close to a mini trade deal.

Those gains spilled over into Tuesday following a report that President Donald Trump was considering cutting some tariffs on Chinese goods.

Markets also banked higher on a reported easing in China´s one-year lending rate, while London advanced after a survey showed Britain´s key services sector had avoided contraction in October.

“European markets are following Asian stocks higher, as optimism over talks between the US and China continues to boost sentiment,” said IG analyst Joshua Mahony.

“With the PBoC (People´s Bank of China) deciding to cut the one-year medium-term lending rate in China, it is clear that the bank remains committed to supporting the Chinese economy while negotiators work on removing the current US tariffs.”

He added: “A cut to the Chinese lending rate has helped improve sentiment as rumours circle that the US could remove … tariffs.”

The Financial Times said Tuesday that the White House is considering dropping existing tariffs on more than $100 billion of imports to seal the deal with China.

It cited unnamed sources as saying officials were looking at rolling back levies on a range of imports including clothing, appliances, and flatscreen monitors, which have been subject to 15 percent rates since September 1.

The US has imposed duties on Chinese goods worth hundreds of billions and the removal of some of these is said to be a key demand of Beijing in any trade agreement.

Meanwhile, a Bloomberg News article said Chinese officials were looking at locations in the United States where Xi Jinping and Donald Trump could hold a signing ceremony as early as this month.

In Asia, Tokyo led gainers as it reopened after a long weekend to play catch-up with Monday´s rally.

The Nikkei ended 1.8 percent higher, while Shanghai rose 0.5 percent and Sydney added 0.2 percent.

Hong Kong won 0.5 percent as investors brushed off data showing a key measure of business confidence fell to its lowest level in more than a decade as the city reels from global trade woes and violent protests.

Last Friday´s forecast-busting US jobs report has meanwhile lifted investor hopes that the US economy — the world´s biggest — is stabilising.

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