World equity markets rebound on muted trade hopes

Published: May 25, 2019 13:43:29 | Updated: May 31, 2019 12:28:25

File Photo (Collected)

World equity markets rebounded on Friday from the previous day’s sharp fall, boosted after US President Donald Trump’s comments.

Trump said complaints against China’s Huawei Technologies might be resolved within the framework of a Sino-US trade deal.

Tensions remained high, with China accusing US Secretary of State Mike Pompeo of fabricating rumours after he said Huawei’s chief executive was lying about the telecom network gear maker’s ties to the Chinese government.

On Thursday, Trump said a trade deal could resolve US complaints against Huawei, but also called the company “very dangerous.”

Investments remain highly susceptible to headline risk, Shah said, though investors took in stride a U.S. Commerce Department report that said new orders for domestic capital goods fell more than expected in April.

MSCI’s gauge of stock performance across 47 countries gained 0.47 per cent, while the pan-European STOXX 600 index closed up 0.56 per cent, reports Reuters.

The Dow Jones Industrial Average rose 117.75 points, or 0.46 per cent, to 25,608.22. The S&P 500 gained 8.1 points, or 0.29 per cent, to 2,830.34.

The Nasdaq Composite added 22.63 points, or 0.3 per cent, to 7,650.91.

The dollar edged off two-year highs set on Thursday, pressured as the weak US manufacturing activity data sparked worries the trade conflict with China may hurt the world’s largest economy.

Against a basket of six major currencies, the dollar was down 0.28 per cent at 97.586, well off the two-year high of 98.371 the previous session.

The euro rose 0.23 per cent to $1.1206 while the Japanese yen strengthened 0.26 per cent versus the greenback at 109.31.

US Treasury yields rose, as Trump’s remarks about Huawei encouraged investors to book profits a day after a surge in government bond prices and ahead of a long US holiday weekend.

Benchmark 10-year US Treasury notes fell 8/32 in price to push yields up to 2.3237 per cent.

US markets will close on Monday for Memorial Day, a federal holiday.

Oil prices climbed 1.0 per cent but still posted their biggest weekly drop of the year, pressured by rising inventories and worries about the global economy.

US crude inventories rose to their highest since July 2017, suggesting ample supplies in the world’s top consumer.

Brent crude, the global benchmark, rose 93 cents to settle at $68.69 a barrel. For the week, it fell almost 5.0 per cent.

US West Texas Intermediate crude traded up 72 cents to settle at $58.63. For the week WTI fell 6.5 per cent.

Gold steadied, under pressure from the equities rebound but supported by a weaker dollar and growing expectations for a US interest rate.

US gold futures for June settled down 0.1 per cent at $1,283.60 an ounce.

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