Stock markets around the world moved higher on Friday following signs of progress in U.S.-China trade talks, while the British pound and German bond yields fell after lawmakers rejected Prime Minister Theresa May’s Brexit agreement for the third time.
Improved risk sentiment helped buoy benchmark U.S. yields as demand decreased for safe-haven bonds.
MSCI’s gauge of stocks across the globe gained 0.49 per cent and was on pace to rise more than 11 per cent for the quarter.
U.S. officials held “constructive” talks in Beijing, Treasury Secretary Steven Mnuchin said, concluding the latest round of dialog with China aimed at resolving the trade dispute between the world’s two largest economies.
Wall Street indexes briefly pared gains, before recovering, after influential Federal Reserve Vice Chair Randal Quarles gave a bullish view of the U.S. economy and said more rate increases may be needed if recent positive trends in productivity and investment continue.
“The two big drivers of stock returns so far this year have been optimism regarding a U.S.-China trade agreement and that the Fed has become a lot more dovish,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
Lyft Inc’s shares opened up more than 20 per cent in their market debut on Friday, giving the ride hailing startup a market value of more than $27-billion, amid strong investor demand that bodes well for larger rival Uber Technologies Inc.
Lyft’s IPO, which is this year’s biggest thus far, sets the stage for other Silicon Valley unicorns seeking to debut in the stock market this year, including Pinterest Inc, Postmates Inc and Slack Technologies Inc.
U.S. stocks ended the final trading day of the first quarter on a strong note on Friday, and the S&P 500 registered its best quarterly gain since 2009, boosted by optimism over trade talks between the United States and China.
The Dow Jones Industrial Average rose 211.22 points, or 0.82 per cent, to 25,928.68, the S&P 500 gained 18.96 points, or 0.67 per cent, to 2,834.4, and the Nasdaq Composite added 60.16 points, or 0.78 per cent, to 7,729.32.
Canada’s main stock index fell on Friday as heavyweight financial and energy stocks lost ground.
The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 53.40 points, or 0.33 per cent, at 16,102.09.
Shares of BlackBerry Ltd. rose 13.1 per cent, leading the gains on the TSX, after the company topped quarterly profit estimates, helped by a sharp rise in fees for licensing and using its technologies as it develops more software and solutions for customers.
The energy sector dipped 0.5 per cent despite an increase in crude prices.
The financials sector, which accounts for about a third of the main index’s weight, slipped 0.5 per cent. The industrials sector dipped 0.2 per cent.
The materials sector, which includes precious and base metal miners and fertilizer companies, dipped 0.4 per cent.
The Canadian dollar rallied to a one-week high against the greenback on Friday, to end the first quarter up more than 2 per cent as investors cut bearish bets on the currency after data showed surprising strength in the domestic economy.
The Canadian economy grew by 0.3 per cent in January, beating analysts forecasts and reversing recent declines as the construction and manufacturing sectors picked up.
In contrast, U.S. data consumer spending data suggested the economy was fast losing momentum after growth slowed in the fourth quarter.
“Those numbers, strong Canadian data with weak U.S. data just did a whammy on the market.” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.
Investors who were short the currency, expecting it to extend recent losses, were forced to cut their positions, Anderson said.
Recent data from the Commodity Futures Trading Commission has showed that investors have added since February to bearish bets on the loonie.
Chances of a Bank of Canada interest rate cut by December dropped to 45 per cent from nearly 70 per cent before the data, the overnight index swaps market indicated.
The Canadian dollar was trading 0.7 per cent higher at 1.3353 to the greenback, or 74.89 U.S. cents. The currency touched its strongest intraday level since March 21 at 1.3342.
The loonie fell 1.4 per cent in March. Still, it has advanced 2.2 per cent since the start of the year, the best performance in the G10.
The pan-European STOXX 600 index rose 0.60 per cent.
European asset prices were rattled after lawmakers rejected Prime Minister Theresa May’s Brexit deal for a third time, leaving Britain’s withdrawal from the European Union in turmoil.
The pound weakened against the U.S. dollar following the news, while Germany’s 10-year government bond yield fell.
In the U.S., benchmark 10-year notes last fell 6/32 in price to yield 2.4086 per cent, from 2.389 per cent late on Thursday.
Capital markets have closely followed moves in Treasuries since last week, when the 3-month U.S. yield exceeded the yield on the 10-year note, an inversion of the yield curve that is widely seen as an indicator of a recession.
U.S. consumer spending barely rose in January and income increased modestly in February, suggesting the economy was fast losing momentum after growth slowed in the fourth quarter, data showed.
The dollar index, which measures the greenback against a basket of currencies, rose 0.06 per cent, with the euro unchanged at $1.122.
The Turkish lira weakened again and the government promised reforms after a volatile week.
Oil prices rose about 1 per cent on Friday, posting their biggest quarterly rise in a decade, as U.S. sanctions against Iran and Venezuela as well as OPEC-led supply cuts overshadowed concerns over a slowing global economy.
The May Brent crude oil futures contract, which expired Friday, gained 57 cents, or 0.84 per cent, to settle at $68.39 a barrel, marking a first-quarter gain of 27 percent. The more-active June contract settled up 48 cents at $67.58 a barrel.
U.S. West Texas Intermediate (WTI) futures rose 84 cents, or 1.42 per cent, to $60.14 a barrel, and posted a rise of 32 percent in the January-March period.
For the two benchmarks, the quarterly rise was the biggest since the second quarter of 2009, when both gained about 40 per cent.
Reuters