Stock markets gained ground yesterday on news that US President Donald Trump planned to delay auto tariffs.
Industry sources told AFP Trump was planning to delay imposing tariffs on European Union auto imports while the US pursues agreements with key trading partners.
Across Europe, London’s FTSE 100 rose 0.8% to close at 7,296.95 points, Frankfurt’s DAX 30 was up 0.9% at 12,099.57, while Paris’ CAC 40 gained 0.6% at 5,374.26.
European and US markets that had been in negative territory earlier in the day suddenly jumped higher, with German auto manufacturers among those who stood to benefit.
“Whether or not the news will be confirmed remains to be seen. Traders are buying European car shares” meanwhile, remarked Fawad Razaqzada at Forex.com.
Asian equity markets had already surged higher in the wake of strong gains elsewhere on Tuesday.
The dollar was mixed against main rivals, with the euro limiting its loss thanks to data that showed a rebound in first quarter German growth.
The pound slipped lower “as Brexit woes for the (UK) prime minster dented the mood in the forex markets,” noted Neil Wilson at Markets.com.
Although stock markets have been whipsawed by Trump tweets and the twists and turns of Chinese-US trade talks, they “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 $200bn of Chinese goods last week — sparking retaliation from Beijing — Trump has threatened to impose a further $300bn if China does not give ground in the 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% higher and Hong Kong put on 0.5% yesterday.
In the US, sharp drops in the April manufacturing and retail sales indices initially sent shares lower before hope of a delay in auto tariffs turned things around.
Oil prices were stronger, meanwhile, amid tensions in the Middle East.
Saudi Arabia, the world’s top crude exporter, yesterday said that attacks on two of its tankers and a major pipeline targeted the security of global oil supplies.
Drone attacks claimed by 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.
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