Stock markets rise on US-China trade deal hopes

LONDON: Stock markets rose Monday on growing optimism for a trade deal between China and the United States after reports said the two sides were close to a breakthrough.

The dollar traded mixed, while oil prices climbed.

Ahead of a busy week of data releases and expected markets-moving events including the latest Brexit developments, indices got off to a positive start as investors cheered reports saying that the tariffs stand-off between world's top two economies could soon be resolved.

The Wall Street Journal said negotiations in February had narrowed key differences and an agreement could be ready for signing at a summit between US President Donald Trump and Chinese counterpart Xi Jinping later this month.

The newspaper, as well as Bloomberg News, also said Beijing had tentatively agreed to lower tariffs or ease certain restrictions, work quicker to open up its auto market and increase its purchases of US goods.

In exchange for Chinese concessions, Washington would do away with most of the trade sanctions it imposed last year, the reports said.

"Investors are fully aware of these long-term challenges, but a more sustained ceasefire on tariffs will help to reduce business uncertainty," noted Tai Hui, Asia-Pacific chief market strategist at JP Morgan Asset Management.

"This could provide a much-needed lift to business sentiment and improve growth momentum entering the summer," he said.

But there were also warnings that investors could be left disappointed.

"With all this positivity comes the risk that the market is buying on this rumour mill and is becoming more exposed should the good news not materialise," said Neil Wilson, chief market analyst at Markets.com.

"March could well come in like a lion and go out like a lamb."

Focus turns Tuesday to the start of China's annual National People's Congress where it will unveil its growth forecast for this year, while dealers will be looking for any measures to stimulate the stuttering economy.

An official in Beijing on Monday said that the rubber-stamp legislature will vote next week on a bill that will bring "a fundamental change" for foreign investors, which could help ease trade tensions with the US.

Also Tuesday, the EU's chief Brexit negotiator Michel Barnier will meet Britain's Brexit negotiating team, as both sides seek a breakthrough in the stalemated talks.

The meeting, to take place in Brussels, comes after Barnier said on Saturday that the European Union was ready to give Britain further guarantees to help push a troubled divorce deal through the British parliament.

This week also sees the release of Chinese trade data and key US jobs figures, which will provide a fresh look at the state of the US economy and the Federal Reserve's monetary policy plans.

- Key figures around 1130 GMT -

London - FTSE 100: UP 0.6 percent at 7,146.53 points

Frankfurt - DAX 30: UP 0.1 percent at 11,617.18

Paris - CAC 40: UP 0.5 percent at 5,293.42

EURO STOXX 50: UP 0.3 percent at 3,320.43

Tokyo - Nikkei 225: UP 1.0 percent at 21,822.04 (close)

Hong Kong - Hang Seng: UP 0.5 percent at 28,959.59 (close)

Shanghai - Composite: UP 1.1 percent at 3,027.58 (close)

New York - Dow: UP 0.4 percent at 26,026.32 (close)

Euro/dollar: DOWN at $1.1339 from $1.1366 at 2140 GMT on Friday

Pound/dollar: DOWN at $1.3207 from $1.3208

Dollar/yen: DOWN at 111.83 yen from 111.92 yen

Oil - Brent Crude: UP 50 cents at $65.57 per barrel

Oil - West Texas Intermediate: UP 41 cents at $56.21