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Markets rise despite US-China war of words

Nov 19 2018 15:07
AFP


London - Global stocks rose on Monday, despite a war of words between Donald Trump's vice president Mike Pence and Chinese leader Xi Jinping, dealers said.

Europe's major markets climbed as traders shrugged off Brexit and Italy jitters, while Paris also gained despite a massive slump in Renault amid reports its chief Carlos Ghosn had been arrested in Japan over alleged irregularities at Nissan, its long-term partner.

"European stocks are higher ... despite the continued political uncertainty," said CMC Markets analyst David Madden.

"The political landscapes in the UK and Italy are still unsettled, and the US-China trade tensions rumble on."

Sentiment was relatively calm and cautious at the start of the week after the volatility of the last seven days, with oil stabilising and the US Federal Reserve tempering fears about its plans for interest rate hikes.

'Frosty' relations

Asia-Pacific leaders failed on Sunday to bridge gaping divisions over trade at a summit dominated by a war of words between the US and China as they vie for regional influence.

For the first time, APEC leaders were unable to agree on a formal written declaration amid sharp differences between the world's top two economies over the rules of global trade.

Hopes of agreement were jolted by a spat between Pence and Xi over China's economic and regional ambitions, with the US vice president mocking Beijing's "constricting belt" and "one-way road" initiative.

Xi however defended his scheme and hit out at Trump's "America First" protectionist agenda, saying it was a "short-sighted approach" that was "doomed to failure".

"US-China relations remain frosty, with the APEC meeting proving once again that the two sides remain far from any agreement on trade," said IG analyst Joshua Mahony.

"The FTSE 100 is moving cautiously higher ... as further signs of a breakdown in relations between the US and China failed to fully dampen early trade in Europe."

Before the weekend, Wall Street had provided a positive lead after Trump said Beijing had made overtures toward resolving their trade war, meaning he might hold off imposing another round of tariffs.

The president's comments followed an indication from one of his top economics advisers that talks were under way ahead of a planned meeting at the G20 in Argentina at the end of this month.

 Renault hits skids

Paris stocks meanwhile advanced despite tumbling Renault shares.

Nissan said it will ask its board to remove Ghosn as chairman after an inquiry uncovered "significant acts of misconduct," including reporting less than he was earning in Japan and using company assets for personal purposes.

Japan's public broadcaster NHK and other media outlets said Ghosn had been arrested after being questioned by Japanese prosecutors for various improprieties including underreporting his income.

"The story has rocked investor confidence in the Paris-listed stock," said Madden.

Renault's share price plunged 10.65% to €57.63 in Paris, having earlier hit a low at €54.80.

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