World Stocks Higher 06/20 06:43
World shares advanced on Thursday on hopes that a meeting between President
Donald Trump and his counterpart Xi Jinping next week might bring about a truce
in trade tensions.
BANGKOK (AP) -- Global markets advanced Thursday on hopes for a trade truce
between the United States and China and the Federal Reserve's hint at lower
rates. The price of oil surged amid heightened tensions between Iran and the
Confirmation of a meeting between President Donald Trump and his counterpart
Xi Jinping at the Group of 20 summit in Osaka next week has raised hopes for a
political compromise on their tariffs war.
U.S. Trade Representative Robert Lighthizer told a congressional hearing
that he plans to speak with China's top trade envoy, Vice Premier Liu He, soon
and also to meet with him in Osaka.
China's Commerce Ministry confirmed Thursday that the trade negotiators were
holding talks in preparation for the meeting. Prospects for a breakthrough in
the stalled negotiations remain uncertain, however, given the acrimony in
recent weeks over who is to blame over the impasse.
"The only uncertainty out there relative to six or seven months ago is the
U.S.-China trade situation, and for now things are looking up," said Michael
Every of Rabobank.
Germany's DAX added 0.8% to 12,410 while the CAC 40 in France gained 0.5% to
5,548. Britain's FTSE 100 also picked up 0.5% to 7,441. Wall Street looked
poised for gains, with the future contract for the Dow Jones Industrial Average
up 0.8% to 26,753. The S&P 500 future picked up nearly 0.9% to 2,959.
The expected decision Wednesday by the U.S. central bank's policymakers to
leave the Fed's benchmark interest rate unchanged in a range of 2.25%-2.5% and
the signal of openness to lower rates later also reassured investors who have
been worried the trade war could weigh on growth and corporate profits.
"For now, equities seem to be running with the notion that this is all a
good news story," Robert Carnell of ING said in a commentary.
In Asia, Tokyo's Nikkei 225 index added 0.6% to 21,462.86 while the Hang
Seng in Hong Kong surged 1.2% to 28,550.23. Shanghai was up 2.4% to 2,987.12
while Australia's S&P ASX 200 picked up 0.6% to 6,687.40. India's Sensex
advanced 0.8% to 39,431.89.
ENERGY: Oil prices surged more than 3% after Iran's Revolutionary Guard said
it shot down a U.S. drone on Thursday over Iranian airspace. Two U.S. officials
told The Associated Press that the downing happened over international airspace
in the Strait of Hormuz. The drone shooting follows last week's attack on two
oil tankers near the Gulf of Oman. The U.S. blames Iran for the attack on the
ships but Tehran denies it was involved. The attacks come against the backdrop
of Trump's decision to withdraw from Tehran's nuclear deal a year ago.
Benchmark crude oil jumped $1.86 to $55.62 per barrel in electronic trading
on the New York Mercantile Exchange. Brent crude oil, the international
standard, picked up $1.75 to $63.57 a barrel.
CURRENCIES: The dollar fell to 107.76 Japanese yen from 108.10 yen on
Wednesday. The euro rose to $1.1308 from $1.1226.