World stock indexes rose on Monday as hopes for resolving the U.S.-China trade war bolstered investor optimism, and the U.S. dollar index edged higher.
White House adviser Larry Kudlow said tariffs scheduled for December could be withdrawn if talks go well, adding to optimism after China said it would work with the United States to address each other’s core concerns.
In Britain, the parliament’s speaker refused to allow a vote on Boris Johnson’s divorce deal with the European Union, suggesting the British prime minister faces further problems in Brexit ratification.
Johnson’s opponents in parliament on Saturday demanded a change to the sequencing of the ratification of the deal, forcing him to request a delay.
In Toronto, the S&P/TSX composite index rose 41.33 points, or 0.25 per cent, to 16,418.45.
Energy stocks jumped 1 per cent despite a decline in oil prices, while tech stocks gained 1.7 per cent.
Material stocks lost 1.7 per cent as gold eased on Monday on improved appetite for riskier assets, while investors awaited further clarity from the U.S. Federal Reserve on more possible interest rate cuts this year.
Spot gold was down 0.3 per cent at $1,485.03 per ounce. U.S. gold futures settled down 0.4 per cent at 1,488.10.
Leading the index were Knight Therapeutics Inc., up 13.9 per cent, Hudson's Bay Co., up 6.7 per cent, and Tourmaline Oil Corp., higher by 4 per cent.
Lagging shares were Semafo Inc., down 4.9 per cent, Iamgold Corp., down 4.9 per cent, and Turquoise Hill Resources Ltd., lower by 4.9 per cent.
MSCI’s world equity index, which tracks shares in 47 countries, gained 0.6 per cent. The Euro STOXX 600 added 0.6 per cent, while the S&P 500 index was also up 0.6 per cent.
“It looks like the global economy has settled and worries that we’re falling into the depths of a recession have eased,” said Alan Lancz, president of Alan B. Lancz & Associates Inc., an investment advisory firm based in Toledo, Ohio.
“It’s a more settled market,” he said. Also, “it’s a matter of maybe things just on hold politically.”
On Friday, Chinese Vice Premier Liu He said that Beijing will collaborate with the United States to address mutual concerns on the trade war.
Stocks investors are also gearing up for more high-profile earnings reports this week from such companies as Microsoft Corp and Amazon.com Inc..
On Wall Street, the Dow Jones Industrial Average rose 55.68 points, or 0.21 per cent, to 26,825.88, the S&P 500 gained 20.51 points, or 0.69 per cent, to 3,006.71 and the Nasdaq Composite added 73.44 points, or 0.91 per cent, to 8,162.99.
The dollar index was up 0.1 per cent in afternoon trading, while sterling was last trading at $1.2963, down 0.06 per cent on the day.
The Chilean peso was down about 2 per cent and on track for its biggest daily percentage decline in more than six years after a state of emergency was declared in the capital city of Santiago following violent protests over the weekend.
Against the dollar, sterling was last up 0.1 per cent in North American trade, having earlier broken above $1.30 for the first time in 5-1/2 months. The euro was 0.18 per cent higher against the dollar, having also been lifted by Brexit optimism this month by 2.23 per cent.
In the U.S. bond market, benchmark 10-year notes last fell 11/32 in price to yield 1.787 per cent, from 1.75 per cent late on Friday.
Oil prices fell nearly 1 per cent on Monday after comments from a U.S. official fed concerns surrounding the U.S.-China trade war, adding to worries that a slowing global economy would reduce demand for oil.
Brent crude futures fell 46 cents, or 0.8 per cent, to settle at $58.96 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 47 cents, or 0.9 per cent, to settle at $53.31 a barrel.
Although President Donald Trump has said he would like to sign a deal when he meets his Chinese counterpart at November’s APEC summit, the U.S. commerce secretary said an initial trade deal does not need to be finalized next month.
“The key thing is to get everything right that we do sign. That’s the important element. That’s what the president is wedded to,” Wilbur Ross said, after being asked if he would mind skipping an APEC signing.