Stocks aim higher in 'hesitant' tone

Roland JACKSON
Premier Li Keqiang's comments that China will not devalue the yuan have supported emerging market currencies, analysts say

Stock markets mostly advanced Thursday but with investors cautious amid the global trade war, dealers said.

"European stock markets are following Asian counterparts, with a more hesitant tone pervading global trade," noted IG analyst Joshua Mahony.

"The fears over US-China trade are likely to persist for some time yet."

Emerging market currencies held their own after Beijing's pledge not to weaponise the yuan in its trade standoff with the United States.

Markets have been on the rise this week after the latest tit-for-tat tariffs from China and the US were considered lenient and allowed for talks, with observers suggesting a further escalation was unlikely in the near term.

And while China on Wednesday hit back at US President Donald Trump's accusation that it is using the trade conflict to affect November's key mid-term elections, the generally upbeat sentiment continued in Asia and Europe on Thursday.

London stocks added 0.3 percent, helped in part by official data showing UK retail sales rose 0.3 percent in August from a year earlier.

In the eurozone, Frankfurt and Paris equities meanwhile both won 0.7 percent in value.

Wall Street had provided a positive lead with all three main indexes hovering near record highs.

- 'Encouraging' -

Emerging market (EM) currencies enjoyed some much-needed buying support, having been beaten down by trade war fears in recent months, as well as concerns of a spillover from crises in Argentina, South Africa and Turkey.

Analysts said that as well as the easing trade tensions, a key boost for the currencies was Premier Li Keqiang's statement that China would not devalue the yuan to fend off the effects of any tariffs.

"China will never rely on the depreciation of the renminbi (yuan) to stimulate exports, because a one-way depreciation of the renminbi exchange rate will have more disadvantages than advantages," he told an economic forum.

"The premier's comments are encouraging as they indicate that China won't actively use its currency as a weapon in its trade scuffle with the US," said Rodrigo Catril, senior forex strategist at National Australia Bank.

However, he added: "As we have seen in recent months this doesn't necessarily mean that China will prevent the yuan from weakening if market forces push the currency lower."

- Key figures around 1130 GMT -

London - FTSE 100: UP 0.2 percent at 7,346.01 points

Frankfurt - DAX 30: UP 0.5 percent at 12,283.74

Paris - CAC 40: UP 0.7 percent at 5,433.49

EURO STOXX 50: UP 0.7 percent at 3,393.02

Tokyo - Nikkei 225: FLAT at 23,674.93 (close)

Hong Kong - Hang Seng: UP 0.3 percent at 27,477.67 (close)

Shanghai - Composite: DOWN 0.1 percent at 2,729.24 (close)

New York - Dow Jones: UP 0.6 percent at 26,405.76 (close)

Euro/dollar: UP at $1.1724 from $1.1673 at 2100 GMT

Pound/dollar: UP at $1.3245 from $1.3144

Dollar/yen: DOWN at 112.23 yen from 112.28 yen

Oil - Brent Crude: UP 14 cents at $79.54 per barrel

Oil - West Texas Intermediate: UP 36 cents at $71.48

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