World markets mixed after China, US ease trade tensions

Elaine Kurtenbach

BANGKOK (AP) – World shares were mixed yesterday after China and the United States (US) moved to ease trade tensions.

Sentiment also was brightened by expectations the European Central Bank (ECB) plans fresh stimulus to try to energize the economy.

Germany’s DAX edged 0.1 per cent higher to 12,373.34 and the FTSE 100 in London also gained 0.1 per cent to 7,342.62. The CAC 40 in Paris lost 0.3 per cent to 5,614.78.

Analysts say the bank is likely to cut a key interest rate further below zero yesterday and could take other steps, including restarting a bond-buying programme to pump newly created money into the economy.

In Asia, investors also drew encouragement from China’s decision to exempt some US products from a recent round of tariffs.

Tokyo’s Nikkei 225 index gained 0.8 per cent to 21,759.61 while the Shanghai Composite index also added 0.8 per cent to 3,031.24. The S&P ASX 200 climbed 0.3 per cent, to 6,654.90. Hong Kong’s Hang Seng index slipped 0.3 per cent to end at 27,087.63. Shares also fell in Singapore and Jakarta but rose in Taiwan and Kuala Lumpur.

A man walks past an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo. Asian shares were mixed yesterday after China moved to ease trade tensions. PHOTO: AP

An escalation in the trade war roiled financial markets this summer as investors fretted that higher tariffs and a slowing global economy could tip the US into a recession. The economic uncertainty has also become a drag on companies.

Some of those trade concerns appeared to ease on Wednesday after China said it will exempt American industrial grease and some other imports from tariff increases, though it kept in place penalties on soybeans and other major US exports ahead of negotiations next month.

As a gesture of “goodwill,” US President Donald Trump said on Twitter that the US agreed to a two-week delay in a planned increase in tariffs on some Chinese imports.

The moves could indicate that both sides are settling in for an extended conflict even as they prepare for talks in Washington aimed at ending the dispute that threatens global economic growth.

Still, the uncertainties appear likely to persist.

“Just as the presidential tweet on tariffs this morning has injected more momentum into stocks and most likely emerging-market assets, what one hand gives, the other can take away. We are only one social media posting away from a tho-roughly unpredictable president turning sentiment on its head,” Jeffrey Halley of Oanda said in a commentary.

Investors continue to expect the Federal Reserve will cut interest rates at its meeting next week in another bid by the central bank to help maintain US economic growth. The Fed raised its benchmark interest rate in July by a quarter point. That was its first hike in a decade.

ENERGY

Benchmark crude oil lost 17 cents to USD55.58 per barrel in electronic trading on the New York Mercantile Exchange. It fell USD1.65 to settle at USD55.75 a barrel on Wednesday. Brent crude oil, the international standard, gave up 34 cents to USD60.47 per barrel. It dropped USD1.57 to close at USD60.81 a barrel overnight.

The dollar rose to JPY107.86 from JPY107.82 yen on Wednesday. The euro strengthened to USD1.1028 from USD1.1010.