BCN-17,18 Stock markets rise after US-Mexico deal

283

ZCZC

BCN-17

MARKETS-WORLD WRAP (UPDATE)

Stock markets rise after US-Mexico deal

LONDON, Aug 28, 2018 (BSS/AFP) – Stock markets climbed on Tuesday, tracking
another Wall Street record following a trade deal struck between the United
States and Mexico.

Equities had already been enjoying a run higher after Federal Reserve boss
Jerome Powell last week indicated that the US central bank would not
aggressively raise interest rates.

“The positive sentiment in the US on the back of the trade deal with Mexico
has boosted sentiment,” said David Madden, analyst at CMC Markets UK.

“Trade concerns have been hanging over global markets for months, and the
US-Mexico deal proves that there is light at the end of the tunnel.”

About 1030 GMT, London’s benchmark FTSE 100 index was up 0.4 percent. In
the eurozone, Frankfurt’s DAX 30 won 0.1 percent and the Paris CAC 40 gained
0.2 percent.

“The FTSE 100 is playing catch-up with the rest of Europe following the UK
bank holiday yesterday,” Madden explained for the London’s market’s stronger
gains.

The US-Mexico agreement meanwhile raises hopes that the North American Free
Trade Agreement, rejected by the White House soon after US President Donald
Trump’s election, can be salvaged after Canada rejoins talks on Tuesday.

The pact was described by Trump as “a big day for trade” and it sent New
York’s S&P 500 and Nasdaq stocks indices to fresh all-time highs on Monday,
while the Dow broke 26,000 for the first time since January.

Mizuho Securities said in a note to clients that investors are monitoring
“the US-Canada negotiations… and the impact on US-China trade talks”.

Monday’s agreement comes after officials from Washington and Beijing last
week held talks aimed at easing trade tensions that have seen them hit each
other with tariffs on tens of billions of dollars worth of goods.

MORE/SR

ZCZC

BCN-18

MARKETS-WORLD WRAP (UPDATE) 2 LAST

While the meeting did not achieve any breakthrough, the fact it took place
was seen as a good sign.

Stephen Innes, head of Asia-Pacific trading at OANDA, said dealers were “in
a festive mood” as the deal removed “one major hurdle that has been haunting
North American investors for months”.

He added: “Markets are revelling in any trade positives… After all, a
deal is a deal.”

Mexico’s peso jumped more than one percent on the news but struggled to
maintain the gains.

Elsewhere in foreign exchange, Turkey’s lira weakened to around 6.2 against
the dollar as the country’s markets reopened after a week-long holiday, with
dealers continuing to fret over the financial crisis in the country.

The euro added to Monday’s gains that came on the back of data showing
business confidence in the German economy recovered as fears over a US trade
war eased.

However, Trump appeared to temper expectations for a fresh round of talks
with China, saying after announcing the new pact that “it’s just not the
right time to talk right now” before adding “eventually, I’m sure that we’ll
be able to work out a deal”.

– Key figures around 1030 GMT –

London – FTSE 100: UP 0.4 percent at 7,606.89 points

Frankfurt – DAX 30: UP 0.1 percent at 12,555.63

Paris – CAC 40: UP 0.2 percent at 5,490.49

EURO STOXX 50: FLAT at 3,455.57

Tokyo – Nikkei 225: UP 0.1 percent at 22,813.47 (close)

Hong Kong – Hang Seng: UP 0.3 percent at 28,351.62 (close)

Shanghai – Composite: DOWN 0.1 percent at 2,777.98 (close)

New York – Dow Jones: UP one percent at 26,049.64 (close)

Euro/dollar: UP at $1.1705 from $1.1680 at 2100 GMT

Pound/dollar: UP at $1.2901 from $1.2895

Dollar/yen: DOWN at 111.06 yen from 111.07 yen

Oil – Brent Crude: UP 58 cents at $76.79 per barrel

Oil – West Texas Intermediate: UP 22 cents at $69.09

BSS/AFP/SR/1725 HRS