MOSCOW, may 10 — Dow Jones. World stock markets rise on Friday, after Washington’s decision to raise tariffs on Chinese goods, and promises of Beijing to enter a response. Investors are pinning their hopes for further dialogue between the two countries.
Asian indices moved to a sharp growth after emergence at midnight us time news about increase of import duties. China’s Shanghai Composite at the end of trading gained 3.1 per cent, Hong Kong’s Hang Seng rose 0.8%, although for the week the indices lost more than 4.5%.
Meanwhile, futures on American indexes S&P 500 and Dow Jones Industrial Average lost 0.1%. Apple Shares
the pre-fell 0.3% — the tech giant is heavily dependent on China in terms of supply.
The United States on Friday raised the import duties on Chinese goods worth $ 200 billion to 25%. The increase in fees took effect a few hours after the representatives of China and the United States on Thursday met to try to put the negotiations back to normal. The discussion of trade relations between the two countries should resume on Friday. In recent days, both sides accused each other of violating the agreements and threatened to impose retaliatory measures.
Investors are still hopes for an agreement that supported the recovery in the equity markets. China’s Vice Premier Liu he remains in Washington, and it says that “there is still the possibility of further negotiations to resolve trade disputes,” said Zhang gang, a senior analyst at Central China Securities.
Although the Chinese macro data in recent weeks has improved, weaker-than-expected statistics on Bank lending, published on Thursday, also enhances the hopes of additional stimulus from Beijing, said Gan.
In the morning the pan-European Stoxx 600 added 0.7%. On the eve of the index suffered the strongest one-day loss since the beginning of 2019. Resource and technological sectors Stoxx 600 has risen by more than 1%. These sectors are extremely sensitive to issues of international trade and dependent on emerging markets.
Investors looking for an explanation of today’s rally.
“We don’t know where is the end point or how the market will behave from now on,” said Duska Maharaj, an analyst at J. P. Morgan Asset Management. She pointed to two factors behind the recovery, including strengthening expectations for China’s response in the sphere of fiscal policy and the fact that “the attitude of the Chinese authorities could be more aggressive.”
This year, stock markets around the world benefit from waiting for the conclusion of a trade agreement. S&P 500, Stoxx 600 and the Hang Seng since 1 January grew by more than 10%. Market participants now want to know how China will respond to the increase in tariffs.
Donald trump restrain the threat, noting that China’s President XI Jinping has written to him “very beautiful letter” on Wednesday. Trump probably will personally speak with the leader of China in the hope that they will be able to resolve contradictions.
The Chinese yuan strengthened against the dollar by 0.2%, but with the beginning of the week loses 1%. One of the key requirements of the United States to China in the negotiations is the introduction of measures to counter the volatility of the yuan.
The WSJ dollar index fell 0.1 percent, partially losing the five-day growth. The yield on 10-year U.S. Treasury increased to 2,454% from last 2,453%. Earlier, the yield on 10-year bonds for the first time since March has fallen below the yield on 3-month Treasury bonds.
Improving economic data may explain the more aggressive behavior of both sides in us-China talks, said Victor yort, Director of credit strategy at BNP Paribas.
“These new divisions would occur after the very favorable Chinese macro data and positive data on U.S. economic growth, said yort. — Maybe both sides now feel that a stronger in comparison with the beginning of negotiations.”
While investors fear that raising taxes and deferred trade agreements may negatively affect economic growth.
“Lengthy negotiations may undermine economic stability and will likely lead to a drop in global economic growth below the average level,” said Paul Donovan, senior economist at UBS Global Wealth Management.
Investors expect the us data on consumer price inflation.
Brent crude oil rose 0.5% to 70,73 dollars per barrel, recouping losses from earlier in the week. Copper futures rose 0.5% to 6168,50 dollars per ton.
Authors David Hodari, [email protected], Shen Hong, [email protected]; translation PRIME, +7 (495) 645-37-00, [email protected]
Dow Jones Newswires, PRIME
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