LONDON (Reuters) – Stocks rose globally on Friday as expectations grew that the US and China would open new trade negotiations, while an interest rate hike in Turkey supported lira and global risk appetite.
The German DAX chart with stock indices is shown on the stock exchange in Frankfurt, Germany, September 13, 2018. REUTERS / Employees
The MSCI All-Country World index, which holds stocks in 47 countries, was almost half a percent higher than the day after the start of trading in Europe.
Under the guidance of technology and car stocks, the pan-European STOXX 600 index rose by half a percent, set at its best weekly gain in seven weeks.
Tech shares rose 0.7 percent after Apple won on Wall Street after closing Europe [.EU].
MSCI's broadest index of equities in Asia and the Pacific region outside of Japan rose 1.2 percent. Australian equities rose 0.6 percent, Seoul & # 39; s Kospi rose 1.4 percent and Hang Seng in Hong Kong won 1 percent. The Nikkei stock index in Japan was 1.2 percent higher.
These increases followed Wall Street on Thursday and the Dow Jones Industrial Average ended 0.57 percent higher, the S & P 500 gained 0.53 percent and the Nasdaq Composite 0.75 percent.
Chinese equities, despite a brief shock, reported data showing that industrial output and retail sales were at the foresight summit in August.
Other data showed that real estate investments in the country declined in August, raising concerns that a real estate market could increase the risks to China's economic prospects as the trading environment deteriorates.
China's benchmark Shanghai Composite index fell by 0.2 percent and the blue-chip CSI300 index rose by 0.2 percent.
Chinese officials welcomed an invitation from Minister of Finance Steven Mnuchin for new talks. But US President Donald Trump tempered market expectations and tweeted Thursday that the US "is not under pressure to make a deal with China."
The Trump government is preparing a final list of $ 200 billion worth of Chinese imports that it intends to levy tariffs in the coming days. That step would mean an escalation in the trade war and could significantly slow down global growth.
Capital Economics analysts noted that Mnuchin had signed a deal with China in May, which was smothered by Trump a few days later.
"As a result, he has little credibility with Chinese policy makers," they said.
Friday, the state-run English-language newspaper China Daily said in an editorial that China would not "surrender" to US demands and "will not hesitate to take countermeasures at US rates to protect China's interests."
Uncertainty about the global prospects for trade was underlined by the European Central Bank, which kept the policy unchanged as expected Thursday and warned that the risks of protectionism increased.
A strong rise in interest rates by the Turkish central bank in support of a tumbling lira strengthened the risk appetite in emerging markets. The bank ran its benchmark rate by 625 basis points to 24 percent.
Currency risks in both Turkey and Argentina have fueled fears of contagion in recent weeks, hurling assets from emerging markets from Indonesia to India to South Africa.
After an increase of 6,1442 to the dollar, the lire on Friday reduced to 6,0768.
Turkish lira implied volatility meters fell to their lowest level in more than a month on Friday, when sentiment continued to improve.
"The bold decision (by the central bank of Turkey) reduces the risk that a complete financial crisis can unfold", analysts at Rabobank wrote in a note to customers.
"Having said that, it is only the first step and we continue to believe that an interest rate increase in itself would not be enough to lead to a sustainable recovery in the lira." The central bank's efforts should go hand in hand with an implementation of constructive macroprudential policy by the government. "
The euro hit two weeks high and extended Thursday's earnings after ECB CEO Mario Draghi's comments focused on healthy domestic fundamentals, including rapid growth in employment and wage increases [FRX/].
The pound reached a six-week high of $ 1,3139, an increase of 0.3 percent and set at the second-largest week hike in 2018. [GBP/]
The dollar eased 0.1 percent against the yen to 111.82.
American crude oil was 0.3 percent higher at $ 69.12 per barrel when Hurricane Florence approached the American East Coast. Brent crude oil increased by 0.6 percent to $ 78.62 per barrel.
Spot gold won more than half a percent to $ 1208.05 per ounce. [GOL/]
Reporting by Ritvik Carvalho, additional reporting by Saikat Chatterjee in London; editing by Larry King