Global stocks gain as U.S. eases Huawei restrictions
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In Europe, the broader Euro STOXX 600 edged up 0.3%, with Germany’s DAX rising 0.6%, while France’s CAC 40 climbed 0.2%.
At the close, China’s Shanghai Composite index was up 1.23%, while the blue-chip CSI300 index ended 1.35% higher.
U.S. President Donald Trump’s government added Huawei to a trade blacklist last week, escalating trade tensions between the world’s two biggest economies.
Washington then allowed Huawei Technologies Co Ltd to purchase American-made goods to maintain existing networks and provide software updates to existing Huawei handsets until Aug. 19.
“The Huawei extension is in some sense providing a relief rally as it eases the worst fears of market participants that we are drifting towards a fully-fledged trade war,” said Aberdeen Standard’s head of global strategy, Andrew Milligan.
Chipmakers Infineon and STMicro were up 1.4 to 3.5%, and the tech sector rising more than 1% after losing almost 3% on Monday.
The autos and suppliers sector was another top gainer, up as much as 1.1%.
In London, heavyweights HSBC, Prudential and Standard Chartered boosted the blue-chip index as markets on hopes if an easing in the trade tensions.
In Asia, gains in heavyweight Samsung Electronics helped South Korea’s KOSPI stock index close up 0.3%.
The MSCI index of world shares, which tracks shares in 47 countries, was little changed at 0.01%.
“Equity markets remain hostage to developments in the ongoing US-China trade battle,” said Rupert Thompson, head of research at Kingswood.
“We still believe some kind of deal will eventually be reached – most likely at a Xi/Trump meeting at the G20 Summit in late June.”
In Germany, Daimler got an additional boost after German newspaper Handelsblatt reported the company was looking to cut administration costs by 20%.
Italy’s biggest phone group Telecom Italia led gainers on the STOXX 600 after posting first-quarter earnings in-line with expectations and confirming its guidance for the next three years.
POUND SLIPS
In currency markets, the British pound fell below $1.27 for the first time since mid-January, hit by dollar strength and expectations that Prime Minister Theresa May will fail to persuade cabinet colleagues to back an amended version of her Brexit withdrawal deal.
The pound slipped 0.2% to $1.2688 while against the euro it was down 0.14% to a new four-month low of 87.88 pence,.
The US dollar was supported by some safe haven inflows, while Australia’s top policymaker Philip Lowe said on Tuesday the central bank will consider the case for lower interest rates at its June policy meeting, pushing the Aussie dollar lower half a percent to $0.6873.
Oil prices edged higher on U.S.-Iran tensions and amid expectations that producer club OPEC will continue to withhold supply this year.
Brent crude futures, the international benchmark for oil prices, were at $72.18 per barrel at 0651 GMT, up 21 cents, or 0.3 percent, from their last close.
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