Global stocks rise as Trump punctures pound

LONDON: Global stock markets rose on Friday with investors mildly hopeful that China and the US can still settle their war over tariffs.

On currency markets, the pound slumped after US President Donald Trump attacked UK Prime Minister Theresa May’s Brexit strategy, but recovered after he seemed to backtrack later in the day.

Equities have had a rollercoaster week, with strong US jobs figures providing support before Trump’s threatened tariffs on another $200 billion of Chinese imports causing a large sell-off.

“Equities are steadily gaining,” noted Chris Beauchamp, chief market analyst at traders IG. “Of course, the path higher has been made much easier by the absence of any trade war comments, tweets or observations.”

– Can they work it out? –

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Beijing’s measured response to Trump’s tariffs threat and indications from both sides that they are willing to talk has instilled trading floors with a little optimism heading into the weekend.

“Trade war concerns was a key talking point again and a major concern amongst economists, politicians and central bankers. However, market participants have on the whole been evidently less concerned about it all,” said Fawad Razaqzada at Forex.com.

US Treasury Secretary Steven Mnuchin on Thursday told lawmakers the White House was “available” for discussions with China.

That came after China’s Vice Minister of Commerce Wang Shouwen said the economic superpowers “should sit down and try to find a solution to this trade problem”.

But in a development Friday that could unsettle hopes of progress, data showed that China’s trade surplus with the United States hit a record last month.

The imbalance is at the heart of Trump’s anger at what he describes as Beijing’s unfair trade practices that are hurting American companies and destroying jobs.

– ‘Dumped and trumped’ –

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On currency markets Friday, sterling was hammered early in the session by fresh concerns about May’s political future.

In an interview released Friday to coincide with Trump’s visit to Britain, the president said the British prime minister’s plans for close future ties with the EU would “probably kill” her hopes for a trade deal with the United States.

Lukman Otunuga, Research Analyst at FXTM, said the pound had been “dumped and trumped” at the end of what was already “a terrible trading week for the British pound thanks to political instability at home and Brexit-related uncertainty”.

Trump later seemed to want to take the edge off his earlier remarks, saying “whatever you do is okay with us, just make sure we can trade together, that’s all that matters”.

That helped sterling to recover to trade little changed on the day, and in turn weighed on London stocks, which are often boosted by a soft British currency.

However, the pound now stands more than seven percent lower against the dollar than three months ago, and about two percent down against the euro over the same period.

– Key figures at 1545 GMT –

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London – FTSE 100: UP 0.1 percent at 7,661.87 points (close)

Frankfurt – DAX 30: UP 0.4 percent at 12,540.73 (close)

Paris – CAC 40: UP 0.4 percent at 5,429.20 (close)

EURO STOXX 50: UP 0.3 percent at 3,454.54

New York – Dow: UP 0.3 percent at 25,010.40

Tokyo – Nikkei 225: UP 1.9 percent at 22,597.35 (close)

Hong Kong – Hang Seng: UP 0.2 percent at 28,525.44 (close)

Shanghai – Composite: DOWN 0.2 percent at 2,831.18 (close)

Dollar/yen: DOWN at 112.48 yen from 112.53 yen at 2100 GMT

Euro/dollar: DOWN at $1.1665 from $1.1671