Global stock markets enjoyed a G20 bounce on Monday amid hopes of a truce in the trade war between the US and China.
London’s FTSE 100 index and European markets followed Asia higher as US President Donald Trump and China’s Xi Jinping agreed to restart talks on trade at the weekend summit in Osaka, Japan.
The dispute between the world’s two biggest economies has led both to slap billions of dollars worth of tariffs on each other’s exports, raising concerns over global growth and corporate profits.
But the renewed hopes of a rapprochement, as well as a potential softening of Trump’s hard line on American suppliers to controversial Chinese telecoms firm Huawei, comes amid expectations of rate cuts from the US Federal Reserve as soon as next month.
London’s FTSE 100 rose almost 1%, gaining 69.21 to 7494.84, which was echoed across European markets. The Dax index in Germany, whose car industry is a big exporter to China, rose stronger still, 1.6%. Japan’s Nikkei and China’s CSI 300 gained 2% and 2.9%.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said: “We expect talks to continue over the coming months, with the most likely outcome, as we previously expected, a prolonged truce on trade. Both sides have strong incentives to avoid further rounds of retaliation. However, we also believe neither side is in a rush for a deal.”
