Stocks were mixed in Europe and the US as participants awaited any details from the latest round of US-China trade talks, although investors remained hopeful that an agreement between the two sides could ease the conflict.
The dollar lost ground to most major currencies, with the renminbi touching a one-month high. Oil prices continued to rise.
As European stocks trimmed earlier losses, Wall Street’s S&P 500 pushed 0.6 per cent higher to 2,546. The Nasdaq Composite index was up 0.9 per cent.
The trading pattern came after a week of market turmoil amid signs that the impact of the dispute was showing up in economic data and in demand in China, after Apple issued a revenue warning.
But the mood on Wall Street remained buoyed by a dovish signal on the pace of US monetary policy tightening from the Federal Reserve’s chairman, Jay Powell, on Friday.
Last week’s strong US employment report also continued to offer support, as markets digested the latest non-manufacturing survey from the Institute for Supply Management, which showed the pace of growth in the US service sector falling to its lowest level in five months.
China’s renminbi rose to a one-month high and China-focused stocks also gained, helped by the announcement of stimulus measures on Friday.
The onshore renminbi, which moves within a trading band of 2 per cent in either direction from a fix set by China’s central bank, was 0.3 per cent higher at Rmb6.8445 per dollar after touching its highest point since December 5, while the offshore rate not bound by that band gained 0.3 per cent to Rmb6.8457.
Frankfurt’s Xetra Dax was down 0.4 per cent and the FTSE 100 fell 0.6 per cent. The region-wide Stoxx 600 was 0.3 per cent weaker.
There was a brighter showing in Asia.
Tokyo’s Topix index rose 2.8 per cent with gains across technology stocks in demand. In Sydney the S&P/ASX 200 gained 1.1 per cent.
Hong Kong’s Hang Seng rose 0.8 per cent while in China the CSI 300 index of Shanghai and Shenzhen-listed stocks rose 0.6 per cent.
The gains came as US and Chinese officials resumed negotiations in Beijing, news of which helped the S&P 500 finish Friday’s session up 3.4 per cent. Stocks also got a leg up from soothing comments made by US Federal Reserve chairman Jay Powell suggesting the central bank would be patient on monetary policy this year.
On Monday futures tipped the US stock index to gain 0.3 per cent at the open later in New York.
Forex and fixed income
The dollar index was weaker, down 0.4 per cent at 95.76.
The yen firmed by 0.1 per cent to ¥108.43 per dollar.
The euro was up 0.6 per cent at $1.1458, while the pound ticked up 0.3 per cent to $1.2765
Sovereign bond markets were muted, with the 10-year US Treasury yield flat at 2.65 per cent.
Commodities
Oil prices continued to build on gains made last week on growing optimism for progress on US-China trade talks, with international benchmark Brent crude up 2.9 per cent at $58.71 a barrel. West Texas Intermediate, the US marker, rose 3.4 per cent to $49.60.
Gold rose 0.3 per cent to $1,288 per ounce.
