Global stocks turn higher as China says tariff war may ease

Business

A currency trader holds a phone at the foreign exchange dealing room in Seoul, South Korea, Thursday, Nov. 7, 2019. Asian stocks are mostly lower after a meandering day of trading left U.S. stock indexes close to their record highs. (AP Photo/Lee Jin-man)

BANGKOK (AP) — Global stocks rose Thursday after China said it had agreed with the United States to gradually ease tariffs on each other’s exports as part of an effort to scale back their trade war.

Germany’s DAX rose 0.7% to 13,269 and France’s CAC 40 gained 0.2% to 5,875. London’s FTSE 100 rose 0.4% to 7,422 after the Bank of England kept rates on hold but saw some policymakers push for a cut.

On Wall Street, the future contract for the benchmark Standard & Poor’s 500 was up 0.4% and Dow Jones Industrial Average advanced 0.5%.

Gao Feng, the Chinese Commerce Ministry spokesman, said Thursday that envoys had “agreed to a phased cancellation of tariff increases depending on the progress of negotiations.”

He told reporters that if both sides reach a first phase agreement, then based on that deal they will cancel already imposed tariffs proportionately.

Presidents Donald Trump and Xi Jinping agreed last month to resume trade talks aimed at resolving a more than year-long dispute over technology and industrial policy. As part of that truce, they halted further tariff hikes.

Despite the upbeat comments Thursday, it is unclear when the two presidents can sign a wide-ranging deal.

The U.S.-China trade war has been a top concern for investors since early 2018, and momentum has recently been tilting toward at least a partial agreement.

That, combined with encouraging reports on the economy and corporate profits, have recently propelled U.S. indexes past their prior peaks from July to all-time highs.

Both sides in the China-U.S. standoff have incentives to ease tensions. China’s economic growth has slowed under the weight of increased U.S. tariffs. Meanwhile, Trump’s chances of re-election likely hinge on the economy. A worsening trade war would sour that.

One thing more certain for investors has been the steady flow of better-than-expected profit reports from big companies. Over the last month, hundreds have told investors how much they made from July through September, and in most cases the declines were not as steep as analysts had forecast.

Benchmark U.S. crude gained 83 cents to $57.18 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, rose 78 cents to $62.52.

The dollar rose to 109.13 Japanese yen from 108.96 yen. The pound fell to $1.2813 from $1.2855 as two of nine rate-setters at the Bank of England vote for a rate cut, surprising some investors, amid uncertainty for the economy over an election and Brexit. The euro gained to $1.1079 from $1.1068.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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