Reuters | Apr 05, 2018 06:20
* Investors expect U.S., China to negotiate after all
* EU stocks hit 2-week high, Wall St set to extend recovery
* Dollar gains, bond yields rise
* World stock valuations cheapest in more than 2 years (Updates prices, adds quote)
By Kit Rees
LONDON, April 5 (Reuters) - World stocks edged higher on Thursday as investors responded to signs of an easing of Sino-U.S. trade tensions by dipping back into riskier assets.
Sentiment was lifted as Washington expressed a willingness to negotiate, after proposed U.S. tariffs on $50 billion of Chinese goods prompted swift retaliation from Beijing. S&P 500 mini futures ESc1 rose 0.4 percent, leaving Wall Street poised to build on Wednesday's rebound.
The euro EUR= held steady at $1.2276.
Proposed 25 percent U.S. tariffs on some 1,300 industrial technology, transport and medical products from China will be subject to a public comment and consultation period that is expected to last around two months.
"I think that the substance of trade restrictions and their real impact will be far less than the headlines," said Jeffery Becker, Chairman and CEO at Jennison Associates in New York.
"U.S. and Chinese cross-border trade has grown significantly over the last decade and economic inter-dependence runs very deep, deeper than the actual trade numbers."
Asian stocks also benefited, with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS up 0.6 percent, a day after it hit its lowest in almost two months.
Japan's Nikkei .N225 ended 1.5 percent higher. Markets in mainland China, Hong Kong and Taiwan were closed for the Tomb Sweeping Day holiday on Thursday.
Many suspect Washington will likely back down on some fronts after Beijing threatened tariffs on soybeans, the top U.S. agricultural export to China.
That is considered one of the most powerful weapons in Beijing's trade arsenal given the potential impact on Iowa and other farming states that backed Donald Trump in the presidential election. soybeans Sc1 and corn Cc1 regained ground on Thursday, following losses of around 2 percent the previous day.
NOT SO RISKY?
Some observers argue that the global economy is currently running so well that it could cope with the impact of the proposed tariffs, which cover a fraction of world trade.
"We've had a few months now where markets have really been going sideways and progressively lower, but at the same time has data really rolled over? The answer is no," Geoffrey Yu, head of the UK investment office at UBS Wealth Management, said.
"The underlying economy is actually chugging along which will increase the scope for upside surprises on the corporate front, on the economic front and at some point markets will have to catch up to that."
U.S. data on Wednesday underscored the prevailing bullish view on the economy. Private payrolls increased solidly in March as hiring rose across the board, boding well for Friday's jobs data. correction since January has driven share price valuations down from record levels, attracting bargain hunters.
MSCI ACWI .MIWD00000PUS traded at 14.77 times its forward earnings, the lowest in more than two years.
Oil prices bounced back in tandem with global share prices, and on a surprise draw in U.S. crude stockpiles. U.S. crude futures CLc1 traded at $63.38 per barrel, flat in percentage terms.
Bond markets were hit by the recovery in equities as demand for safe-haven assets ebbed. The yield on the German 10-year DE10YT=RR touched a one-week high of 0.538 percent, while U.S. treasury yields US10YT=RR were at 2.827 percent.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World Equity Index Valuations
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.