Global stocks follow Wall Street higher on stimulus hopes
BEIJING (AP) — Global stock markets and Wall Street futures rose Friday after President Donald Trump said talks had resumed on an aid package for the struggling U.S. economy.
London and Frankfurt opened higher. Shanghai and Sydney advanced. Tokyo and Hong Kong declined.
Wall Street gained Thursday after President Donald Trump, who earlier called off negotiations with legislative leaders, said “very productive” talks had begun. Separately, a report indicated the near-record pace of U.S. job losses might be slowing.
Stock prices have been volatile since mid-September as investors swing between optimism about possible development of a coronavirus vaccine and unease that markets recovered too fast and shares are too expensive.
“When the world’s financial markets are at the mercy of the randomness emanating from the White House, it is hardly surprising that investors elsewhere would prefer to wait on the side-lines,” said Jeffrey Halley of Oanda in a report. “Unfortunately, things are unlikely to settle down over the next few weeks.”
In early trading, London's FTSE 100 gained 0.3% to 5,998.38 and the DAX in Frankfurt added under 0.1% to 13,051.30. The CAC 40 in Paris was up 0.5% at 4,935.11.
On Wall Street, futures for the benchmark S&P 500 index and Dow Jones Industrial Averages were up 0.4%.
In Asia, the Shanghai Composite Index, resuming trading after a weeklong holiday, rose 1.7% to 3,272.08. The Nikkei 225 in Tokyo lost 0.1% to 23,619.69 and the Hang Seng in Hong Kong shed XXX.
Sydney's S&P-ASX 200 ended unchanged at 6,102.20 and India's Sensex added 0.6% to 40,429.93. New Zealand and Jakarta advanced while Singapore and Bangkok.
Trump said in a TV interview that “very productive” talks had begun on more stimulus after supplemental unemployment benefits that supported consumer spending, the engine of the U.S. economy, expired.
That helped to fuel optimism that Republicans and Democrats will deliver another aid package after weeks of uncertainty.
Wall Street's benchmark S&P 500 index rose 0.8% to 3,446.83. The Dow Jones Industrial Average gained 0.4% to 28,425.51. The Nasdaq composite picked up 0.5% to 11,420.98.
Banks, technology and communication companies accounted for much of the gains.
Energy stocks rose as the price of U.S. crude oil climbed more than 3%. Occidental Petroleum climbed 8.8%, the biggest gainer in the S&P 500.
A government report showed that 840,000 workers applied for unemployment benefits last week. That's down slightly from 849,000 the prior week.
Several areas of the economy have been slowing recently. That has investors focused on whether Congress can deliver more aid.
On Tuesday, Trump said he told his representatives to halt negotiations until after the November election because he said House Speaker Nancy Pelosi was negotiating in bad faith. That caused stocks to fall 1.4%.
Trump said later he would be open to aid for the airline industry and $1,200 in payments to Americans. Stock rose Wednesday in response to that.
Pelosi spoke with Treasury Secretary Steven Mnuchin on Wednesday about a measure to aid airlines but said Thursday that had to be part of a more expansive bill.
On Thursday, Trump said he shut down talks “because they weren’t working out. Now, they are starting to work out.”
Some investors also see rising poll numbers for Joe Biden in the upcoming presidential election as an indication more stimulus may be on the way, regardless of what Trump says. If Democrats sweep the White House, Senate and House of Representatives, they say a big rescue package becomes more likely. And that could offset higher taxes and tighter regulations that a Democratic-controlled government could also create.
To skeptics, stocks still look expensive relative to corporate profits. Meanwhile, U.S.-Chinese tension over trade and technology is simmering.
France reported a record number of infections on Wednesday. Germany is seeing a jump in new coronavirus infections, raising fears the pandemic is gaining in a country that so far has coped better than many of its European neighbors. Britain is considering new controls amid evidence measures already in effect have failed to contain the virus.
In energy markets, benchmark U.S. crude lost 7 cents to $41.12 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.24 to $41.19 on Thursday. Brent crude, used to price international oils, shed 7 cents to $43.27 per barrel in London. It rose $1.35 the previous session to $43.34 a barrel.
The dollar declined to 105.89 yen from Thursday's 106.02 yen. The euro rose to $1.1791 from $1.1758.