Global shares rebound, extending Wall Street gains

BANGKOK (AP) — Shares powered ahead in Europe and Asia yesterday, helped by for progress in trade talks between China and the United States (US) and by expectations that the US central bank will cut interest rates soon.

Britain’s FTSE 100 added 0.6 per cent to 7,538.01 and the CAC 40 in Paris rose 0.8 per cent to 5,593.98. In Germany, the DAX jumped 0.9 per cent to 12,335.75. Wall Street looked set for gains, with the future for the Dow Jones Industrial Average up 0.5 per cent to 27,329. The future for the S&P 500 added 0.4 per cent to 3,008.00.

Reports that Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer spoke with their Chinese counterparts as planned, with more talks to come, helped ease concerns over the deepening trade war between Washington and Beijing.

The standoff over China’s longstanding trade surpluses and its policies aimed at building up advanced high-tech industries has added to concerns over slowing demand and weaker Chinese growth.

Expectations that the US Federal Reserve will move quickly to cut interest rates have also helped buoy sentiment.

Comments by the president of the Federal Reserve Bank of New York, John Williams, suggesting central banks need to “take swift action” when conditions turn adverse, have whetting investors’ appetites for buying, analysts said.

A Chinese man monitors stock prices at a brokerage in Beijing. – AP

“Investors are highly sensitive to dovish comments from Fed presidents these days, as they are trying to figure out whether the Fed would lower its interest rates by 50 basis points by the end of this month,” Ipek Ozkardeskaya of London Capital Group said in a report.

“Given that a 50-basis-point cut would trigger a further rally in global equities, any remark of dovish nature translates immediately into higher asset prices,” she said.

In Asian trading, Japan’s Nikkei 225 index jumped two per cent to 21,466.99 while Hong Kong’s Hang Seng climbed 1.1 per cent to 28,765.40. The Shanghai Composite index rose 0.8 per cent to 2,924.20, while in South Korea, the Kospi added 1.4 per cent to 2,094.36. India’s Sensex slipped 1.3 per cent to 38,390.88. Shares rose in Taiwan and Southeast Asia.

Investors are looking ahead to corporate earnings.

So far, in the US the results have been mixed, though only about 13 per cent of S&P 500 companies have reported, according to FactSet. Analysts expect profits to fall 2.4 per cent overall by the time all reports are tallied.

ENERGY: Benchmark crude oil advanced 57 cents to USD55.87 per barrel in electronic trading on the New York Mercantile Exchange. It fell USD1.48 to settle at USD55.30 a barrel on Thursday. Brent crude oil, the international standard, picked up 84 cents to USD62.77 per barrel.

CURRENCIES: The dollar rose to 107.65 Japanese yen from 107.30 yen on Thursday. The euro weakened to USD1.1250 from USD1.1279.