Aug 30, 2019: Eurozone equity markets rebounded on Thursday, and London extended gains on positive sentiment surrounding US-China trade talks, while the pound steadied after a Brexit-fuelled slump.
“European stock markets are higher… as there are positive noises coming out of China in relation to the trade situation,” said David Madden, analyst at traders CMC Markets UK.
“US-China relations have been volatile recently, but for now there is a sense that things are heading in the right direction, and that has coaxed some traders back into the market.”
In Milan, the FTSE MIB index gained almost 2.0 percent after Italian President Sergio Mattarella gave Prime Minister Giuseppe Conte a mandate to form a new government
Investors were mulling the significance of a fall in the yield, or interest rate, on 10-year US bonds, which has recently dropped below that for two-year Treasury notes — often seen a pointer to recession.
Yields on 30-year government paper have touched a fresh all-time low meanwhile as investors bet on longer-term economic weakness.
It comes against a backdrop of slowing global growth and uncertainty about the Federal Reserve's plans for cutting interest rates to support the US economy.
In foreign exchange, the pound was stable a day after it fell on UK Prime Minister Boris Johnson's shock decision to bring an end to the parliamentary year and not restart it until mid-October.
While he said the extended recess was to draw up a full legislative programme, anti-Brexiters were fuming that it would cut short any time they could have to debate a plan to avert a no-deal exit from the EU on October 31, with some calling it a “coup”.
Johnson could face a vote of no confidence, which could lead to a British general election and continued uncertainty for the already struggling economy.
The euro fell back as incoming European Central Bank chief Christine Lagarde signaled that she would stick with Mario Draghi's controversial expansionary monetary policy that has propped up the eurozone economy amid growing risks to growth.
Lagarde's written comments to the European Parliament meanwhile were well received at the Frankfurt stock exchange.
– Key figures around 1530 GMT –
- London – FTSE 100: UP 1.0 percent at 7,184.32 points (close)
- Frankfurt – DAX 30: UP 1.2 percent at 11,838.88 (close)
- Paris – CAC 40: UP 1.5 percent at 5,449.97 (close)
- EURO STOXX 50: UP 1.4 percent at 3,411.33
- Tokyo – Nikkei 225: DOWN 0.1 percent at 20,460.93 (close)
- Hong Kong – Hang Seng: UP 0.3 percent at 25,703.50 (close)
- Shanghai – Composite: DOWN 0.1 percent at 2,890.92 (close)
- New York – Dow: UP 1.4 percent at 26,388.42
- Pound/dollar: DOWN at $1.2196 from $1.2213 at 2100 GMT
- Euro/pound: FLAT at 90.68 pence
- Euro/dollar: DOWN at $1.1059 from $1.1076
- Dollar/yen: UP at 106.48 yen from 106.14 yen
- Brent North Sea crude: UP 18 cents at $60.67 per barrel
- West Texas Intermediate: UP 62 cents at $56.40 per barrel