LONDON: World stock markets wavered Thursday as investors mulled US President Donald Trump's threat to impose more tariffs on China should crunch talks with his Chinese counterpart Xi Jinping fail this weekend.
Equity markets in Asia rose but Europe mostly lapsed into negative territory as trade war jitters returned ahead of a G20 summit in Osaka, Japan.
Wall Street opened higher, buoyed by updated data that confirmed America's economy grew at a solid 3.1 percent clip in the first three months of the year.
Gold dropped after recent strong rallies, while oil prices retreated ahead of next week's key OPEC output meeting.
Bitcoin plunged nearly $2,000 after recent surges, once more emphasising the volatility of crytocurrencies.
"The G20 summit will include trade talks between the US and China and investors will be looking for any sign that the two countries can sort out their differences," noted Russ Mould, investment director at online stockbroker AJ Bell.
"Investors in Asia are certainly looking optimistic with markets in China, Hong Kong, India and Japan all rallying. European markets are more muted."
Before setting off for the G20 summit in Japan, Trump said in an interview that he had a "Plan B" in case the face-to-face talks show no progress, adding he would "take in billions and billions of dollars a month and we'll do less and less business with them".
He said Xi wanted to make a deal as "China's economy is going down the tubes".
His remarks on Fox Business Network came soon after Treasury Secretary Steven Mnuchin said the two sides were "90 percent" of the way to an agreement when talks broke down last month, with the US blaming Beijing for backsliding.
Still, observers said traders were taking the latest developments with a pinch of salt.
"The market is unreactive to these types of headlines given that Trump has continued to adopt a 'good cop/bad cop' strategy with... Mnuchin," said Stephen Innes at Vanguard Markets.
"Instead, market participants are content to wait for Saturday's meeting to unfold where the proof will be in the pudding.
"A harmonious photo op could go a long way to soothing investors' concerns at the market open on Monday," Innes added.
However, while there is optimism for an eventual agreement, analysts say they are not expecting anything major to come out of the Osaka meeting.
"The G20 is looking to be a disappointment to investors looking for a blockbuster trade deal to be announced and is now expected to yield a new round of talks between the US and China to be held later this year," added Oanda analyst Alfonso Esparza.
- Key figures around 1330 GMT -
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London - FTSE 100: DOWN 0.2 percent at 7,398.60 points
Paris - CAC 40: DOWN less than 0.1 percent at 5,496.33
Frankfurt - DAX 30: UP 0.3 percent at 12,2281.98
EURO STOXX 50: UP less than 0.1 percent at 3,444.44
New York - Dow: UP less than 0.1 percent at 26,560.61
Tokyo - Nikkei 225: UP 1.2 percent at 21,338.17 (close)
Hong Kong - Hang Seng: UP 1.4 percent at 28,621.42 (close)
Shanghai - Composite: UP 0.7 percent at 2,996.79 (close)
Euro/dollar: DOWN at $1.1364 from $1.1369 at 2100 GMT
Pound/dollar: UP at $1.2711 from $1.2690
Dollar/yen: DOWN at 107.86 yen from 107.79
Brent North Sea crude: DOWN 11 cents at $66.38 per barrel
West Texas Intermediate: DOWN 13 cents at $59.25 per barrel
Gold: DOWN at $1,406.20 per ounce from $1,410.78
Bitcoin - DOWN at $11,733 from $13,698