European stocks edge higher ahead of Trump-Xi meeting

Global stock markets moved tentatively higher yesterday, with a narrower US trade deficit buoying gains on Wall Street ahead of a key US-China summit later this week, dealers said.European markets sloughed off earlier weakness caused by the Saint Petersburg metro attack on Monday, which left 14 dead and dozens injured and had initially sent investors rushing for haven investments like gold and the yen.London’s FTSE 100 was up 0.5% at 7,321.82 points, Frankfurt’s DAX 30 was 0.2% up at 12,282.34 points, Paris’ CAC 40 climbed 0.3% at 5,101.13 points and the EURO STOXX 50 advanced 0.3% at 3,481.66 points at close.While sentiment had been also hampered by anxiety over this week’s crucial US-China summit, where trade issues were likely to take centre stage, data from the US Commerce Department showed the US trade deficit narrowed in February.In its biggest monthly drop since September, the trade gap shrank 9.6% to a seasonally adjusted $43.6bn on falling imports of cars, consumer goods, fuel and semiconductors, the data showed.After an initially mixed start in Europe, stocks prices in Frankfurt, Paris and London all ended the session higher.Nevertheless, caution was likely to prevail ahead of the meeting between US President Donald Trump and his Chinese counterpart, Xi Jinping, analysts said.Stock markets were “vulnerable to downside shocks... as investors lost appetite for risk ahead of the Trump-Xi summit this week,” said FXTM analyst Lukman Otunuga.“While the fanatical optimism over Trump’s proposed fiscal policies boosting US growth has fuelled the phenomenal stock market rally, the rising protectionist fears and concealed concerns over the pro-growth agenda falling short of expectations could catalyse an unexpected selloff,” the expert warned.On Thursday and Friday, Trump will host Xi at his Mar-a-Lago resort in Florida.The encounter is expected to address disputes over trade policy between the world’s two most powerful nations and leading economies.Trump recently said he expects the meeting with Xi “will be a very difficult one”. It follows a series of attacks by him on Beijing’s trade policies and accusations it is a currency manipulator.Back in Moscow, Russia’s Investigative Committee said yesterday that they suspected a suicide bomber was behind the attack in the Saint Petersburg metro.The death toll from the bombing in Russia’s second city rose to 14 yesterday, as Kyrgyzstan said a suicide bomber from the Central Asian country had staged the attack.Investors will also focus this week on the March US jobs report and the release of minutes from the most recent monetary policy meetings of the US Federal Reserve and European Central Bank.