European and US equities advance

LONDON: European and US stock markets moved higher on Monday as trade and geopolitical tensions eased and bond yields pulled back from a key psychological barrier, analysts said.

“Sentiment rebounded mid-Monday, with European shares turning positive and Wall Street opening narrowly higher after bond yields slipped back from earlier highs,” said analyst Jasper Lawler at London Capital Group.

The rate of return on 10-year US treasury bonds touched 3.0 percent before falling back.

“A breakout beyond three percent in treasuries is a psychological line in the sand for many institution investors allocating money between bonds and equities,” said Lawler.

Both London and Paris closed with gains of more than 0.4 percent while Frankfurt trailed with a gain of nearly 0.3 percent.

The Dow was 0.2 percent higher in late morning trading in New York.

European indices had earlier been knocked lower by news that business activity in the eurozone continued to grow at a lacklustre pace in April, bringing fresh doubt on the strength of the economic recovery in Europe.

Data monitoring company IHS Markit flagged a slight slowdown in France, where strikes were interrupting a resurgence unleashed by government reforms. Powerhouse Germany was also off strong activity seen earlier in the year.

But a weak euro and pound are generally supportive of European exporters, and European indices turned positive as the opening of trading on Wall Street approached.

The major European indices are now trading at or near their highest levels since early February.

“An easing of geopolitical tension has also helped on the margins, on reports that US Treasury Secretary Steve Mnuchin might be heading to China to thrash out some form of truce on trade with Chinese officials,” said Michael Hewson, chief market analyst at CMC Markets UK.

Beijing on Sunday said it would welcome a visit from Mnuchin, who said Saturday he was considering a trip to the Chinese capital to hold talks on the trade dispute seen as a threat to the global economy.

Also helping ease tensions was a declaration Saturday by North Korean leader Kim Jong Un that his country would halt nuclear tests and intercontinental missile launches ahead of a planned summit with US President Donald Trump

Earlier, Asian stock markets largely closed lower, with technology firms extending last week’s sharp losses as investors fret over the future of the once-lucrative smartphone sector, traders said.

Meanwhile, oil prices fell back from 3.5-year highs struck last week on comments by Saudi Energy Minister Khaled al-Faleh on Friday that the global market has the capacity to absorb higher prices.

Saudi Arabia and Russia had also said at an OPEC meeting in Jeddah they would press on with a production cap deal to defend higher prices.

Focus this week is also on a slew of US data, including economic growth and personal consumption. A number of US companies are also to release their first quarter earnings, including Google parent Alphabet, Boeing, ExxonMobil and Coca-Cola.

– Key figures around 1530 GMT –

New York – Dow: UP 0.2 percent at 24,511.41 points

London – FTSE 100: UP 0.4 percent at 7,398.87 (close)

Frankfurt – DAX 30: UP 0.3 percent at 12,572.39 (close)

Paris – CAC 40: UP 0.5 percent at 5,438.55 (close)

EURO STOXX 50: UP 0.6 percent at 3,514.57

Tokyo – Nikkei 225: DOWN 0.3 percent at 22,088.04 (close)

Hong Kong – Hang Seng: DOWN 0.5 percent at 30,254.40 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,068.01 (close)

Euro/dollar: DOWN at $1.2 from $1.2286 at 2100 GMT on Friday

Dollar/yen: UP at 1 yen from 107.62

Pound/dollar: DOWN at $1.3 from $1.4014