Stock markets jump on report of delayed US auto tariffs

Stock markets jump on report of delayed US auto tariffs

Written on 05/15/2019
AFP

Investors are looking ahead to a possible meeting between Donald Trump and Xi Jinping at the G20 next month (Fred DUFOUR)

London (AFP) – Global stock markets gained ground Wednesday, bouncing back from early losses in Europe and the US on a report that President Donald Trump planned to delay US auto tariffs. 

Bloomberg said that Trump was planning to delay imposing tariffs on EU auto imports by six months, at which point European stock markets leapt back into positive territory.

Asian equity markets had already surged higher in the wake of strong gains elsewhere on Tuesday.

Early Wednesday, trading in New York bounced back even though unexpectedly poor economic data showed the US economy was off to a sluggish start in the second quarter of the year.

The dollar was mixed against main rivals, with the euro supported by official data showing a rebound in first quarter German growth.

“The fears over the possibility of a substantial reversal of trade war progress has added a substantial amount of volatility to markets, yet as the past 24 hours have shown, markets still exhibit hope that we could see some form of resolution emerge from this current standoff,” noted Joshua Mahony, senior market analyst at IG trading group.

After more than doubling tariffs on $200 billion of Chinese goods last week — sparking retaliation from Beijing — US President Donald Trump had threatened to hit a further $300 billion with more levies if he does not get his way in high-stakes talks.

He then gave markets some hope that a deal between the economic titans would eventually be struck.

Shanghai’s main stocks index ended 1.9 percent higher and Hong Kong put on 0.5 percent Wednesday.

In the US, sharp drops in the April manufacturing and retail sales indices initially sent stocks lower, before the Bloomberg report turned things around.

Elsewhere, oil prices were mainly stronger amid tensions in the Middle East.

Saudi Arabia, the world’s top crude exporter, on Wednesday said that attacks on two of its tankers and a major pipeline targeted the security of global oil supplies.

Drone attacks claimed by Iran-aligned Yemeni rebels shut down one of the kingdom’s main oil pipelines on Tuesday, further ratcheting up Gulf tensions after the mysterious weekend sabotage of four ships, two of them Saudi tankers.

The International Energy Agency confirmed that the world’s oil supply fell last month as US sanctions on Iran tightened and OPEC+ members produced less crude in line with their pact.

In its latest monthly report on the global oil market, the Paris-based IEA said that while geopolitics and industry disruptions were clouding the outlook, it believed the market balance was set to flip from surplus into deficit, which would favour efforts by oil producing nations to keep prices high.

– Key figures around 1500 GMT –

London – FTSE 100: UP 0.7 percent at 7,290.66 points

Frankfurt – DAX 30: UP 0.7 percent at 12,079.88

Paris – CAC 40: UP 0.3 percent at 5,358.55

EURO STOXX 50: UP 0.4 percent at 3,378.30

Tokyo – Nikkei 225: UP 0.6 percent at 21,188.56 (close)

Hong Kong – Hang Seng: UP 0.5 percent at 28,268.71 (close)

Shanghai – Composite: UP 1.9 percent at 2,938.68 (close)

New York – Dow: UP 0.1 percent at 25,563.61

Euro/dollar: FLAT at $1.1209 from $1.1208 at 2040 GMT

Pound/dollar: DOWN at $1.2868 from $1.2907

Dollar/yen: DOWN at 109.47 yen from 109.62 yen

Oil – Brent Crude: UP 37 cents at $71.61 per barrel

Oil – West Texas Intermediate: FLAT at $61.79 per barrel

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Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.