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Stocks climb after China slashes US levies

Many investors are betting that the virus can be contained. ©AFP

London (AFP) - Stock markets got a boost Thursday from a Chinese move to slash levies on US imports which helped offset concerns about the economic impact of the coronavirus outbreak.

Investors cheered China's announcement that it would halve levies on $75 billion worth of US imports after the two sides last month signed their mini trade deal that dialled down a long-running and painful trade war.

This helped equities on both sides of the Atlantic build on gains seen Wednesday when figures showed private firms added a forecast-smashing 291,000 new jobs last month, the biggest gain since December 2014.

"Stock markets...pushed higher (on) the announcement that China will halve the tariffs it imposes on $75 billion worth of US imports", said CMC Markets analyst David Madden.

"The move by Beijing is a nice way to take the pressure off the Chinese economy in light of the coronavirus situation," Madden said.

Going up

After last week's big share price losses, and a near eight-percent drop for Shanghai's main stocks index on Monday, observers said traders were happy to pick up shares relatively cheaply, with some healthy earnings reports also providing much-needed support.

"The markets are not only holding up but they're going up," said AxiCorp analyst Stephen Innes. 

Markets were meanwhile also looking ahead to Friday's non-farm payrolls data in the US that will provide a snapshot of the world's top economy, dealers said.

Meanwhile Trump can now "fully concentrate on his (presidential) election campaign and he probably has a good chance to win a second term", noted Ipek Ozkardeskaya, senior analyst at online lender Swissquote Bank. 

"The anticipation of a Trump win should continue boosting demand in US equities."

Among individual stocks, Deutsche Bank soared in Frankfurt after a US fund manager took a large stake in the loss-making German lender, seen as a vote of confidence in its turnaround plans.

In commodities, oil prices at first extended a rebound as investors bet on OPEC and other major producers led by Russia cutting output on fears the virus slashes crude demand.

But crude turned mixed following reports that Russia had rejected a proposal by OPEC kingpin Saudi Arabia for a new round of concerted output reductions, saying it needed more time.

Key figures around 1645 GMT

London - FTSE 100: UP 0.3 percent at 7,504.79 points (close) 

Frankfurt - DAX 30: UP 0.7 percent at 13,574.82 (close)

Paris - CAC 40: UP 0.9 percent at 6,038.18 (close)

EURO STOXX 50: UP 0.7 percent at 3,805.52

New York - Dow: UP 0.3 percent at 29,378.94

Shanghai - Composite: UP 1.7 percent at 2,866.51 (close)

Hong Kong - Hang Seng: 2.6 percent at 27,493.70 (close)

Tokyo - Nikkei 225: UP 2.4 percent at 23,873.59 (close)

Euro/dollar: DOWN at $1.0980 from $1.0999 at 2200 GMT

Pound/dollar: DOWN at $1.2939 from $1.3002

Euro/pound: UP at 84.89 pence from 84.60 pence

Dollar/yen: UP at 109.93 yen from 109.83 yen

Brent Crude: DOWN 0.2 percent at $55.17 per barrel

West Texas Intermediate: UP 0.7 percent at $51.12

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