Global markets rallied early in the week as investors were encouraged by growing optimism that the United States and China are close to a deal on trade issues.
pan-european Stocks 600 Monday’s trading session provisionally ended 0.2% higher, following solid gains across Asia and Japan. Nikkei Stock Average South Korea surpassed the 50,000 mark for the first time, increasing by 2.46%. Kospi It rose 2.57% on the day.
Most major European stock exchanges had positive results. FTSE100 Like Spain, it rose nearly 0.1%. ibex 35 The index rose 0.87%, setting a new 52-week high and hitting a new all-time high of 16,000.20.
U.S. stocks also suffered. Dow Jones Industrial Average Add 0.5% as of 4:45pm London (12:45pm New York). S&P500 It has increased to nearly 1%, Nasdaq Composite Increased by 1.6%. The three indexes reached new record highs throughout the session.
More than half of European sectors were negative on Monday morning, but industrials, technology and mining stocks – three industries often considered particularly sensitive to global trade tensions – were the biggest gainers. The Stoxx Europe 600 Technology Index led the way, ending the day up 1.1% while the Stoxx 600 Industrial Products and Services Index rose about 0.3%. Stoxx Europe 600 Basic Resources rose throughout the session but fell below the flatline by the final bell.
Hopes for a trade truce
IBOSS chief economist Rupert Thompson said the latest trade news was the main driver of Monday’s rally in global prices, adding that it further strengthened prospects for a long-term ceasefire to quell tariff hostilities.
“There’s certainly a long grass in the sand that could lead to another major escalation of trade tensions,” Thompson told CNBC’s “Squawk Box Europe.” “Almost certainly, if this happens, the trade ceasefire will probably last longer than the three months or so that has been customary.”
He added: “Certainly that means… there are tailwinds in the market at the moment.”
But Thompson also issued a warning. He warned that underlying geopolitical tensions between the two countries still exist, and noted that the president’s plan for 10% tariffs on Canada, which Thompson said “came out of the blue,” shows that Trump remains “pretty capricious” on trade issues.
Christian Muller-Grissmann, head of asset allocation research at Goldman Sachs, said broader factors were at play regarding the potential growth acceleration.
“I don’t know if things will work out, especially with this deal, but my basic assumption for next year is that things will be a little more reflationary,” Moller-Grissman told CNBC’s “Squawk Box Europe” on Monday.
He said the bank is “moderately risk-oriented”, seeks upside convexity and avoids speculative trading, adding that the current market environment is built around structural optimism, partially supported by increased liquidity. He said “trapped” liquidity could increase the likelihood of a late-cycle acceleration, but cautioned that risks remained.
— Tasmin Lockwood contributed to this report.
