New York: Global stock markets mostly rose Friday, with London’s equity market benefiting from a weaker pound, as optimism on the US economic outlook outweighed lingering trade war worries.
European equities were all solidly higher at the close. US stocks were mixed, with the Dow rising to a second straight record and the Nasdaq retreating.
Earlier, Asian equity markets had risen.
“Investors continue to brush off the ongoing trade dispute between the US and China,” said Craig Erlam, an analyst at Oanda.
A “lack of escalation” in trade spats combined with optimism on the American economy turned out to be a winning combination, added analysts at the Charles Schwab brokerage.
“Trade concerns remain contained, while the domestic economic front continues to paint a solid picture,” they said.
An unsuccessful Brexit summit in Salzburg, ending in “humiliation” for the British prime minister according to some, weighed on the pound from the start of business but that in turn helped London’s benchmark FTSE 100 index to post a whopping 1.7 percent gain at the finish.
The British currency then weakened further after Prime Minister Theresa May said Brexit talks were “at an impasse” and that the European Union’s response to British plans was “not acceptable.”
– ‘Brave’ to buy pound –
It was a “brave” investor who dared to buy sterling after May’s comments, tweeted Viraj Patel, global macro strategist at ING.
“But (the) long game is one of greater upside than downside if a deal is ultimately reached,” he said.
Oanda’s Erlam, also in a tweet, said that May had said nothing beyond trying to “‘prove’ she’s playing hardball with the EU. Nothing, as ever, has changed”.
But David Madden, a market analyst with CMC Markets UK, saw more substance in May’s performance, saying she “made it clear she is literally willing to walk away from (negotiations) if the EU’s offer doesn’t measure up.”
Asian equities enjoyed another day of strong buying to finish the week with a flourish.
Shanghai surged 2.5 percent after the Chinese government unveiled a stimulus package aimed at lifting domestic consumption.
– EM currencies bounce –
The upbeat mood on trading floors was being felt across the board, with embattled emerging market currencies seeing a recovery.
Those currencies — beaten down in recent weeks by fears of contagion from crises in Turkey, South Africa and Argentina — were also basking in the optimism as traders sought out higher-risk assets.
Earlier, currencies in South Korea, Indonesia and Indian had all gained. South Africa’s rand and the Turkish lira jumped more than one percent.
China’s yuan was helped by remarks from Premier Li Keqiang, who said this week Beijing would not devalue the unit to offset the impact of Donald Trump’s trade duties.
– Key figures around 2040 GMT –
New York – Dow Jones: UP 0.3 percent at 26,743.50 (close)
New York – S&P 500: DOWN less than 0.1 percent at 2,929.67 (close)
New York – Nasdaq: DOWN 0.5 percent at 7,998.96 (close)
London – FTSE 100: UP 1.7 percent at 7,490.23 points (close)
Frankfurt – DAX 30: UP 0.9 percent at 12,430.88 (close)
Paris – CAC 40: UP 0.8 percent at 5,494.17 (close)
EURO STOXX 50: UP 0.8 percent at 3,430.81 (close)
Tokyo – Nikkei 225: UP 0.8 percent at 23,869.93 (close)
Hong Kong – Hang Seng: UP 1.7 percent at 27,953.58 (close)
Shanghai – Composite: UP 2.5 percent at 2,797.48 (close)
Euro/dollar: DOWN at $1.1752 from $1.1777 at 2100 GMT
Pound/dollar: DOWN at $1.3085 from $1.3265
Dollar/yen: UP at 112.58 yen from 112.49 yen
Oil – Brent Crude: UP 10 cents at $78.80 per barrel
Oil – West Texas Intermediate: UP 46 cents at $70.78 per barrel