Stock markets rally on trade hope, merger announcements

Global stocks rose as hopes for a US-China trade deal added to positive momentum following merger announcements

Global stocks rose Monday, with US indices climbing to fresh records as revived hopes for US-China trade progress added to investor confidence following major corporate merger announcements. Markets were cheered after China said at the weekend it would hike penalties on violations of intellectual property rights while also looking at reducing the thresholds for criminal punishments of those who steal IP. The IP issue is a major sticking point for the United States in the discussions and agreement on it is seen as key to their success. China's move on violations comprised "a positive announcement which moves things in the direction of detente," said IG France analyst Alexandre Baradez. Global markets have rallied in recent weeks on expectations that Washington and Beijing will sign a mini-pact as the first part of a wider trade deal, though dealers are growing edgy as the weeks stretch on with no firm commitments. All three major US indices notched fresh records, with the tech-rich Nasdaq leading with a 1.3 percent gain to 8,632.49. Elsewhere, Hong Kong was the standout performer, surging 1.5 percent by the close, and European stock markets were picking up the baton with gains of around half a percent around the half-way stage. Hong Kong's deeply unpopular leader, Chief Executive Carrie Lam, on Monday vowed to "listen humbly" to voters after the pro-democracy camp scored a crushing victory in community-level elections that revealed broad public support for a protest movement that has stirred months of violence. The outcome is "a sound repudiation of the (Hong Kong) administration and Beijing's policy toward Hong Kong," political analyst Willy Lam said. But it does not mean Beijing will budge on the protesters' demands, he added. - Merger mania - Markets also got a lift from a wave of merger activity, headlined by French luxury group LVMH's announcement that it had agreed to buy US jewelers Tiffany for $16.2 billion (14.7 billion euros). LVMH shares saw a two percent gain on the day, while Tiffany jumped 6.2 percent. Meanwhile, TD Ameritrade climbed 7.6 percent following an announcement that it will be bought by rival Charles Schwab in an all-stock deal valued at $26 billion. Schwab advanced 2.3 percent. Losing ground, however, was ride-hailing giant Uber, which was off almost 1.5 percent after London's transport authority refused to renew an operating license, citing safety and security concerns. - Key figures around 2215 GMT - New York - Dow: UP 0.7 percent at 28,066.47 (close) New York - S&P 500: UP 0.8 percent at 3,133.64 (close) New York - Nasdaq: UP 1.3 percent at 8,632.49 (close) London - FTSE 100: UP 1.0 percent at 7,396.29 (close) Frankfurt - DAX 30: UP 0.6 percent at 13,246.45 (close) Paris - CAC 40: UP 0.5 percent at 5,924.86 (close) EURO STOXX 50: UP 0.6 percent at 3,707.68 (close) Tokyo - Nikkei 225: UP 0.8 percent at 23,292.81 (close) Hong Kong - Hang Seng: UP 1.5 percent at 26,993.04 (close) Shanghai - Composite: UP 0.7 percent at 2,906.17 (close) Euro/dollar: DOWN at $1.1011 from $1.1021 at 2100 GMT Pound/dollar: UP at $1.2898 from $1.2834 Euro/pound: DOWN at 85.31 pence from 85.87 pence Dollar/yen: UP at 108.91 yen from 108.66 yen Brent North Sea crude: UP 0.4 percent at $63.65 per barrel West Texas Intermediate: UP 0.4 percent at $58.01 per barrel burs-jmb/dg