World stocks hit one-week high on trade hopes

World stocks hit their highest levels in over a week on Friday as expectations grew that the US and China would open new trade talks.

The MSCI All-Country World index, which tracks shares in 47 countries, was up 0.4 per cent on the day by afternoon trade in Europe.

It had earlier risen as much as half a per cent on the day, touching its highest since September 4.

Led by technology and auto stocks, the pan-European STOXX 600 index was up 0.2 per cent, set for its best weekly gains in seven weeks.

Tech stocks rose 0.4 per cent after Apple gained on Wall Street following Europe’s close on Thursday. Wall Street was set to open higher on Friday, futures indicated.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.2 per cent. Australian shares were up 0.6 per cent, Seoul’s Kospi rose 1.4 per cent and Hong Kong’s Hang Seng gained 1 per cent.

Japan’s Nikkei stock index was 1.2 percent higher, reports Reuters.

Chinese shares fell, despite a short-lived bump from data that showed forecast-topping industrial output and retail sales data for August.

China’s benchmark Shanghai Composite index was down 0.2 percent and the blue-chip CSI300 index rose 0.2 per cent.

A sharp interest rate increase by Turkey’s central bank, to support a tumbling lira, boosted risk appetite in emerging markets. The bank hiked its benchmark interest rate by 625 basis points, to 24 per cent.

Currency crises in both Turkey and Argentina have stoked fears of contagion over the past several weeks, hammering emerging market assets from Indonesia to India to South Africa.

After rising as high as 6.1442 to the dollar, the lira eased to 6.1025 on Friday.

The euro hit a two-week high, extending Thursday’s gains.

The pound reached a six-week high of $1.3139, up 0.3 per cent and set for its second biggest weekly rise of 2018.

The dollar eased 0.1 per cent against the yen to 111.89.

US crude was 0.4 per cent higher at $68.82 a barrel as Hurricane Florence approached the US east coast. Brent crude rose 0.1 per cent to $78.23 per barrel.

Spot gold gained nearly half a per cent to $1205.36 per ounce.