World stocks rally on China-US trade
Global stock markets rallied Wednesday on upbeat China-US trade news, while the pound shot higher as British Prime Minister Theresa May was expected to win a no-confidence vote. Oil prices jumped nearly one dollar as volatility continued to grip world crude markets. A flurry of positive developments in the tariffs stand-off between the world's top two economies provided early Christmas cheer on trading floors, fuelling hopes an all-out trade war can be avoided. In afternoon deals, Paris fizzed 2.2 percent higher, Frankfurt gained 1.4 percent and London won 1.1 percent. Wall Street stocks also snapped higher at the opening bell, with the Dow climbing 1.1 percent. The positivity spilled over from Asia, where Tokyo ended 2.2 percent higher and Shanghai rose 0.3 percent, while Hong Kong jumped 1.6 percent. "The equity markets are taking encouragement from recent reports of a potential truce in the US-China trade dispute," noted VTB Capital analyst Neil MacKinnon. Canada on Tuesday released on bail Meng Wanzhou, chief financial officer (CFO) at Chinese telecoms giant Huawei, whose arrest last week sparked fury in Beijing and worries about a truce agreed at the G20 by Donald Trump and Xi Jinping this month. Providing some extra support to the news of Meng's release was an interview in which Trump said he could intervene in the case if it helps seal a trade pact with China, adding: "Whatever's good for this country, I would do." China added to market-friendly noise by saying it had agreed to cut tariffs on US autos to 15 percent from 40 percent -- wiping out a levy imposed earlier this year in response to US measures. Investors welcomed the headlines but sounded a note of caution. "News flow regarding developments in the US-China trade dispute has been notoriously erratic and positive news can quickly give way to negative news," MacKinnon said. - May confidence vote - Meanwhile, the British pound jumped Wednesday after the BBC reported that a majority of Conservative Party lawmakers were set to back Prime Minister Theresa May in a vote of confidence. Sterling advanced to $1.2631, having earlier hit a fresh 20-month low at $1.2478 -- a level last seen in April 2017. The pound recovered to 90.69 pence versus the euro. According to the BBC, May was set to win the vote with at least 158 Conservative MPs -- more than 50 percent of those eligible -- having pledged their support for the embattled premier. The no-confidence vote was called after May put off a vote on her Brexit deal scheduled for Tuesday to avoid a crushing defeat. "If the prime minister comes out the other side with her job intact, then it takes one of the many uncertainties that have swirled around UK politics for the last few months off the table," Spreadex analyst Connor Campbell noted before the publication of the BBC report. If May does indeed win the vote, Conservative lawmakers will be unable to submit a new challenge to her leadership for one year. - Key figures around 1430 GMT - London - FTSE 100: UP 1.1 percent at 6,878.35 points Frankfurt - DAX 30: UP 1.4 percent at 10,932.28 Paris - CAC 40: UP 2.2 percent at 4,909.68 EURO STOXX 50: UP 1.7 percent at 3,108.54 New York - Dow Jones: UP 1.1 percent at 24,627.72 Tokyo - Nikkei 225: UP 2.2 percent at 21,602.75 (close) Hong Kong - Hang Seng: UP 1.6 percent at 26,186.71 (close) Shanghai - Composite: UP 0.3 percent at 2,602.15 (close) Pound/dollar: UP at $1.2613 from $1.2487 at 2200 GMT Euro/dollar: UP at $1.1347 from $1.1317 Dollar/yen: UNCHANGED at 113.38 yen Oil - Brent Crude: UP 84 cents at $61.04 per barrel Oil - West Texas Intermediate UP 81 cents at $52.46 burs-rl/gd
