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Global stocks inch higher as investors downplay escalating trade war

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NEW YORK (Reuters) – An increase in U.S. expertise stocks and better-than-expected financial knowledge in China pushed international fairness markets higher Monday, regardless of reviews that Washington was contemplating escalating its trade war with China by delisting Chinese corporations from U.S. exchanges.

U.S. President Donald Trump is trying on the transfer as a part of a broader effort to restrict U.S. funding in Chinese corporations, sources instructed Reuters on Friday, although it was not clear how any such delisting would work.

MSCI’s world fairness index .MIWD00000PUS, which tracks shares in 47 nations, rose 0.1%, following a 0.1% acquire for Europe’s Euro STOXX 600 .

On Wall Street, the Dow Jones Industrial Average .DJI rose 67.63 factors, or 0.25%, to 26,887.88, the S&P 500 .SPX gained 9.51 factors, or 0.32%, to 2,971.Three and the Nasdaq Composite .IXIC added 28.28 factors, or 0.36%, to 7,967.91.

China has warned of instability in international markets from any “decoupling” with the United States, noting a U.S. Treasury response that mentioned there have been no instant plans to dam Chinese listings.

There had been few indicators that investors had been fleeing to safe-haven property, with benchmark 10-year notes US10YT=RR final down 4/32 in value to yield 1.687%, from 1.673% late on Friday.

Market gamers mentioned the specter of delisting was being seen as only a tactic earlier than U.S.-China trade talks resume subsequent week. Investors are accustomed to belligerence from Trump earlier than he dials down his rhetoric, mentioned Luca Paolini, chief strategist at Pictet Asset Management.

“It’s a strategy that we have seen in the past – keeping the pressure very high and then settling for whatever deal is possible,” he mentioned.

Any progress in talks subsequent month would in all probability fall wanting a complete deal, he added. “It’s more likely than not that there will some kind of agreement that would be more cosmetic in nature.”

Also supporting the temper in Asia was financial knowledge from China on Monday that confirmed sustained weak spot in exports however a shocking enchancment in home consumption indicators.

“This is better than what the market was expecting,” mentioned Alessia Berardi, senior economist at Amundi Pioneer, including that markets had been downplaying the chance of a serious escalation within the trade war by Washington.

“The probability of implementing the (delisting) decision for the market is still quite low,” she mentioned.

Chinese markets will trade solely on Monday earlier than a week-long vacation that marks the 70th anniversary of the founding of the People’s Republic of China.

The greenback was little modified in opposition to a basket of six main currencies .DXY, including 0.1% to 99.117. Earlier this month it reached 99.37, its highest in additional than two years.

FILE PHOTO: Traders work on the ground on the New York Stock Exchange (NYSE) in New York, U.S., September 17, 2019. REUTERS/Brendan McDermid

China’s offshore yuan CNH=EBS additionally held regular earlier than China’s vacation, buying and selling at 7.139 per greenback.

Oil costs slipped as the trade war continued to weigh on the expansion outlook for China, the world’s largest crude importer. Brent crude LCOc1 futures fell 1.3% to $61.47 a barrel, whereas U.S. crude CLcv1 dropped 0.9% to $55.43.

Reporting by David Randall; Editing by Alex Richardson

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