Left Menu
Development News Edition

GLOBAL MARKETS-Stocks off highs after trade deal announced; Brexit hopes boost pound

Reuters | Updated: 12-10-2019 03:19 IST | Created: 12-10-2019 03:18 IST
GLOBAL MARKETS-Stocks off highs after trade deal announced; Brexit hopes boost pound
Image Credit: Pixabay

Stocks on Wall Street came off their highs in late trading after U.S. President Donald Trump announced a partial trade deal with China that could be signed within weeks, with the boost from New York enough to give stocks across the globe their largest daily gain in two months. The British pound closed its strongest week against the dollar in over two years on hopes that Britain was moving closer to a smooth exit from the European Union and oil jumped over 2% after reports of an attack on an Iranian tanker.

The MSCI world equity index posted its first weekly rise in four. Frankfurt's main stock index, seen as sensitive to trade wars because of its export-oriented components, ended up 2.9% for its biggest daily gain since January 4. The U.S.-China deal agreed on Friday covers agricultural purchases, currency and some aspects of intellectual property protections, and it averted a tariff hike scheduled for next week, though there was no mention of tariffs set to rise in December.

The S&P 500 rose as much as 1.9% but ended the day up 1.1% after the agreement announcement triggered selling. "Anything that was less than a comprehensive agreement was likely to see some degree of market selloff," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

"The timing had a lot to do with the volatility. There were 15 minutes to go in the trading day on a Friday," he said. Investors had said they were hoping for, at best, a deal limited in scope, and noted that rhetoric had in the past failed to translate into meaningful action.

"We have been here before, where we have seen positive talk. It's possible they will be able to do a smaller deal around tariffs, where there is some room for movement," said Mike Bell, global market strategist at J.P. Morgan Asset Management. The Dow Jones Industrial Average rose 390.17 points, or 1.47%, to 26,816.59, the S&P 500 gained 32.14 points, or 1.09%, to 2,970.27 and the Nasdaq Composite added 106.27 points, or 1.34%, to 8,057.04.

The pan-European STOXX 600 index rose 2.31% and MSCI's gauge of stocks across the globe gained 1.38%. Emerging market stocks rose 1.51%.

POUND RALLIES

Sterling jumped 2.55% versus the dollar this week, its largest weekly gain in more than two years. The EU Brexit negotiator reported a "constructive" meeting with his British counterpart. Sterling ended the session at $1.2647, up 1.66%.

The Federal Reserve said it would begin buying about $60 billion per month in Treasury bills to ensure "ample reserves" in the banking system, a program that will continue at least until the second quarter of 2020. The dollar fell toward its session lows after the Fed announcement.

The dollar index fell 0.37%, with the euro up 0.33% to $1.104. The Japanese yen weakened 0.40% versus the greenback at 108.43 per dollar as its global safe-haven luster faded.

In commodities, oil prices rose after Iranian media said a state-owned oil tanker had been attacked in the Red Sea near Saudi Arabia, raising the prospect of supply disruptions, but bearish oil demand forecasts are seen keeping a lid on gains. U.S. crude rose 2.54% to $54.91 per barrel and Brent traded at $60.69, up 2.69% on the day.

The Fed announcement triggered a steepening of the U.S. yield curve, with the spread between 10-year and three-month yields on track to end the session in positive territory for the first time since May. Benchmark 10-year notes fell 23/32 in price to yield 1.7342%, from 1.656% late on Thursday.

The 2-year note fell 4/32 in price to yield 1.5975%, from 1.53% late on Thursday.


TRENDING

OPINION / BLOG / INTERVIEW

New farm bills in India: Focusing on farms or farmers?

... ...

Kenya’s COVID-19 response: Chaos amid lack of information

Confusing numbers and scanty information on how effective curfews and lockdowns have been in breaking transmission have amplified coordination and planning challenges in Kenyas response to COVID-19. Without accurate data, it is impossible t...

Farkhad Akhmedov: Calculating the price of impunity from the law

In insistences such as the battle over the Luna, Akhmedov has resorted to extreme legal machinations to subvert the High Courts decision and keep his assets from being seized. ...

Guinea’s elections hearken back to the autocracy and violence of its past

... ...

Videos

Latest News

Vice President Naidu wishes countrymen on Dussehra

Vice President M Venkaiah Naidu on Sunday extended his best wishes to the citizens on the occasion of Dussehra Vijay Dashmi. Taking to social media, the Vice President wrote, I extend my warm greetings and good wishes to the people of our c...

Truth ultimately triumphs: Rahul greets people on Dussehra

Congress leader Rahul Gandhi greeted people on the occasion of Dussehra on Sunday, saying truth ultimately triumphsTruth ultimately triumphs. Good wishes to all on Vijaya Dashami, he said in a tweet in Hindi with the hashtag HappyDussehraTh...

Entertainment News Roundup: Rousing emotion as 'The Great Gatsby' reopens in London West End; Arnold says feeling 'fantastic' after heart surgery and more

Following is a summary of current entertainment news briefs.Rousing emotion as The Great Gatsby reopens in London West EndAmid the sharp suits and glamorous dresses in 1920s styles, the fashion accessory of 2020 - the face mask - stood out ...

LIC IPO may spill over to next fiscal

The mega initial public offering of Life Insurance Corp LIC may spill over to the next fiscal as the government will first look at the independent actuarial valuation of the countrys largest insurer, a top official has said. Department of I...

Give Feedback