European and US stocks rebounded yesterday on news that Beijing and Washington will hold trade talks, while the Turkish lira rose after Qatar offered to invest $15bn in Turkey.
Frankfurt, London and Paris clawed back much of their losses of more than 1.5% the previous day on Turkey fears and Chinese growth concerns.
Meanwhile on Wall Street, the Dow shot 1.4% higher in late morning trading.
China’s Vice Commerce Minister Wang Shouwen, the deputy representative on international trade negotiations, will meet senior US treasury official David Malpass at Washington’s invitation, Beijing said in a statement.
Traders saw a glimmer of hope of an easing in the ongoing trade battle that has seen the two sides hit each other with reciprocal tariffs on goods worth $34bn.
Washington and Beijing plan to launch a new round of tariffs on $16bn worth of goods from each country on August 23.
Earlier, Asian indices fell on concerns over Turkey’s crisis, but losses were capped by hopes of an end to the tit-for-tat trade war between China and the United States.
Emerging market currencies staged a modest recovery after a tumultuous week for the Turkish lira, which plumbed record lows against the dollar at the start of the week.
The lira’s plunge — ongoing for weeks — turned into a rout last Friday when US President Donald Trump tweeted that his administration was doubling aluminium and steel tariffs for Turkey.
Trump’s decision was made amid a bitter row over Ankara’s detention of an American pastor.
President Recep Tayyip Erdogan said Turkey is facing an “economic attack”. The lira has clawed back some ground in recent days as regulators cut the ability to speculate against the currency.
It held onto gains yesterday as the country’s finance minister told foreign investors that Turkey would emerge stronger from the crisis and has no need for an IMF bailout.
In Europe yesterday, London stocks were aided by strong UK retail sales data for July. The FTSE 100 closed 0.8% up at 7,556.38 points.
Frankfurt, meanwhile, gained 0.6% to 12,237.17 points, despite another slump in the share price of Bayer.
Shares in the German chemicals and pharmaceuticals giant fell 4.6% to €77.05, rocked by media reports of new legal risks stemming from its acquisition of US seeds and pesticides maker Monsanto.
The stock had fallen even more dramatically on Monday after a US jury ordered it to pay almost $290mn in damages to a dying California groundskeeper who said Monsanto’s blockbuster weedkiller Roundup — whose active ingredient is glyphosate — had caused his cancer.
In Paris, The CAC 40 closed 0.8% higher at 5,349.02 points.
The EURO STOXX 50 gained 0.7% to close at 3,381.09 points.
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