Global stocks surge

Paris: Global stock markets rallied on Tuesday and oil prices
surged in a wave of relief after US President Donald Trump delayed
tariffs on electronic goods from China, giving investors hope for
some detente in a US-China trade war.The announcement caused a
dramatic turnaround in equity markets, which had retreated earlier
under the combined impact of tensions in Hong Kong, economic crisis
in Argentina, fears of a global slowdown — and uncertainty over
US-China trade talks.But some of that uncertainty appeared to have
lifted when the US said it was delaying until December 15 the
imposition of new 10 percent tariffs on Chinese
electronics.Meanwhile, US Trade Representative Robert Lighthizer
spoke with Chinese Vice Premier Liu He early Tuesday and has
another call planned in two weeks, a USTR official told
AFP.”US-China reach ceasefire on trade war,” said Alfonso Esparza
at OANDA.”Equities surged with the news as the prolonged trade war
has been the biggest negative factor hitting stocks,” said
Esparza.US equities saw a dramatic turnaround after the news, with
the tech-heavy Nasdaq index up around two percent, and the DJIA and
S&P 500 indices not far behind.Consumer electronics stocks led
the way, with Apple more than four percent higher.Oil prices, a
bellwether for the global economic growth outlook, also surged,
with Brent and WTI contracts up by around three percent.Even though
the US added that it was still going ahead with new duties starting
September 1 on $300 billion in Chinese goods, it did not derail the
markets´ enthusiasm.The dollar also firmed strongly, especially
against the yen, euro and Swiss franc.”The news of the delay of
some US tariffs on certain Chinese goods is positive for risk
sentiment, although the full details aren´t yet known,” said
analysts at ING.But “don´t get carried away with optimism”, they
warned. “The lack of visibility on the trade war outlook means that
the above should not translate into a long-lasting trend.”Until
Trump rekindled hope on the trade war front, equities had been
showing signs of buckling under what Lukman Otunuga at FXTM called
“a burst of geopolitical risks across the globe”.Weakness in Asian
stock markets had spilled first into Europe and from there into
early US trading.A big factor of worry was Hong Kong, where airport
authorities on Tuesday suspended all check-ins as pro-democracy
protesters blocked the facility.
Source: FS – All-News2-Economy
Global stocks surge