Stock markets climb as trade optimism lingers

New York, Nov 8 (AFP/APP): Stock markets rose on Thursday, boosted once more by hopes of a China-US trade deal, with some looking to December for an accord between the two economic superpowers.

The pound slipped meanwhile on talk that a Bank of England rate cut could be in the pipeline after the central bank downgraded its growth outlook.

Bank chiefs meeting Thursday nonetheless left its main rate unchanged for now.

London equities closed only a touch higher, but equity markets elsewhere rose more solidly, along with oil prices, after China said the two sides have agreed a plan to remove tariffs imposed on goods in stages if a preliminary “phase one” agreement announced last month is finalized.

However, the White House did not publicly comment on the claim and gains moderated following a Reuters report that described opposition to rolling back tariffs within the White House.

The pullback revealed continued doubt about a US-China trade agreement despite more conciliatory signs from both sides, said Karl Haeling of LBBW.

Trade war leaves both US and China worse off: UN economists

“Until this thing is nailed down, there is still a lingering concern that it could fall apart,” Haeling said. “You’re one tweet away, so to speak.”

Still, both the Dow and S&P 500 mustered fresh records.

– ‘Adverse reaction’ –

Meanwhile, the Bank of England’s rate decision, which was not unanimous, sparked speculation that easier rates are coming, analysts said.

“Two members preferred a 25 basis point cut in bank rate at this meeting,” the bank’s statement said. The pair judged that “some extra stimulus was needed.”

The central bank also upgraded its British growth forecast to 1.4 percent in 2019 but downgraded 2020 guidance to 1.2 percent.

“Given the political uncertainty ahead of next month’s election it is not at all surprising that the central bank has decided to refrain from any change in policy, but the calls from some members for rate cuts come as something of a surprise and have caused an adverse reaction in the pound,” said David Cheetham at XTB.

Earlier Thursday, the Conservative government canceled a planned release of its own updated economic forecasts just one hour before publication had been due.

“This will no longer go ahead as the Cabinet secretary has concluded that this would not be consistent with the Cabinet Office’s general election guidance,” the Office for Budget Responsibility said in a statement.

Asian markets hit as investors spooked by trade pact delay talk

– Key figures around 2130 GMT –

New York – Dow: UP 0.7 percent at 27,674.80 (close)
New York – S&P 500: UP 0.3 percent at 3,085.18 (close)
New York – Nasdaq: UP 0.3 percent at 8,434.52 (close)
London – FTSE 100: UP 0.1 percent at 7,406.41 (close)
Frankfurt – DAX 30: UP 0.8 percent at 13,289.46 (close)
Paris – CAC 40: UP 0.4 percent at 5,890.99 (close)
EURO STOXX 50: UP 0.5 percent at 3,706.68 (close)
Tokyo – Nikkei 225: UP 0.1 percent at 23,330.32 (close)
Hong Kong – Hang Seng: UP 0.6 percent at 27,847.23 (close)
Shanghai – Composite: FLAT at 2,978.71 (close)
Pound/dollar: DOWN at $1.2813 from $1.2855 at 2100 GMT
Euro/pound: UP at 86.23 pence from 86.09 pence
Euro/dollar: DOWN at $1.1049 from $1.1066
Dollar/yen: UP at 109.29 yen from 108.98 yen
Brent North Sea crude: UP 0.9 percent at $62.29 per barrel
West Texas Intermediate: UP 1.4 percent at $57.15 per barrel.