Global markets breeze higher on growth outlook | 2018-09-23

Global markets breeze higher on growth outlook

23 September, 2018 12:00 AM printer

LONDON: Global stock markets rose Friday as optimism on the US economic outlook outweighed lingering trade war worries, dealers said.

European equities were all solidly higher at the close, with London outshining its peers thanks to a slipping pound as Brexit talks appeared to be stalling, reports AFP.

On Wall Street the Dow index was also firmer approaching midday in New York, building on the previous day’s all-time pinnacles, with investors concluding that trade war concerns were overblown as the world’s biggest economy powers ahead.

“Investors continue to brush off the ongoing trade dispute between the US and China,” said Craig Erlam, an analyst at Oanda.

A “lack of escalation” in trade spats combined with optimism on the American economy turned out to be a winning combination, added analysts at the Charles Schwab brokerage.

“Trade concerns remain contained, while the domestic economic front continues to paint a solid picture,” they said.

An unsuccessful Brexit summit in Salzburg, ending in “humiliation” for the British prime minister according to some, weighed on the pound from the start of business, but that in turn helped London’s benchmark FTSE 100 index to post a whopping 1.7-percent gain at the finish.

The British currency then weakened further after Prime Minister Theresa May said that Brexit talks were “at an impasse” and that the European Union’s response to British plans was “not acceptable”.

It was a “brave” investor who dared to buy sterling after May’s comments, tweeted Viraj Patel, global macro strategist at ING.

“But (the) long game is one of greater upside than downside if a deal is ultimately reached,” he said.

Oanda’s Erlam, also in a tweet, said that May had said nothing beyond trying to “‘prove’ she’s playing hardball with the EU. Nothing, as ever, has changed”.

But David Madden, a market analyst with CMC Markets UK, saw more substance in May’s performance, saying she “made it clear she is literally willing to walk away from (negotiations) if the EU’s offer doesn’t measure up”.