- Reuters/Jeenah Moon
- Global stock markets were continuing to rise Tuesday as trade talks between US and China entered a second day.
- In the first hour of trading in Europe, all major stock indexes were higher, with gains of 0.5% to 0.9% across the board.
- Futures in the US pointed to a gain of about 0.5% for all three major indexes.
- Traders, however, were cautious.
- “Both sides are making encouraging comments that they are on the right track,” Jasper Lawler, the head of research at London Capital Group, said.
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Global markets continued broadly to rally Tuesday as the renewed optimism that characterized the past few days pushed stocks around the world higher.
With trade talks between the US and China starting on a positive foot on Monday, and renewed optimism around the US economy following a blockbuster jobs number last Friday, some of the doom and gloom that characterized the final months of 2018 and the first days of 2019 evaporated.
Mid-level US officials have traveled to Beijing for talks with Chinese counterparts, and early signs were positive. Wilbur Ross, the US commerce secretary, said he was confident a deal could be struck in a round of talks focused on US access to China to do business and the transfer of intellectual property between the two nations.
Sentiment was also helped by a further easing of monetary policy from China’s central bank. The People’s Bank of China made substantial efforts to ease lending conditions Friday with a 1% cut in banks’ reserve requirements ratios (the first of four possible cuts in 2019).
While clear gains were being made, particularly in Europe, on Tuesday morning, an air of caution remained.
“Traders are adopting a wait and see approach before deciding whether the latest round of US-Sino trade talks will be productive,” Jasper Lawler, the head of research at London Capital Group, said in an email.
“Both sides are making encouraging comments that they are on the right track, and whilst that is offering some support to equities the markets know that we have been here before.”
Here’s the scoreboard:
- In the first hour of trading in Europe, all major stock indexes were higher, with gains of 0.5% to 0.9% across the board. The Euro Stoxx 50 broad index of major European corporations was up 0.59% as of about 8:45 a.m. GMT (3:45 a.m. ET).
- Asian stocks were painting a marginally less positive picture, with Chinese stocks nursing small losses at the close. The Shanghai Composite lost about 0.2% of its value on the day, while the Shenzhen Composite was down 0.1%.
- Not all Asian indexes fell, however, with Japan’s Nikkei up 0.8% and the Hang Seng in Hong Kong climbing 0.1%.
- In the US, futures markets pointed to a positive open for all three major indexes. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq were all set to open higher by exactly 0.55%.
- Both Brent crude and West Texas Intermediate were up by about 0.3%. Brent was trading at $57.55 a barrel, while WTI was at $48.66.