Global equity markets rallied and the Japanese yen fell on Tuesday as Chinese President Xi Jinping’s promise to cut import tariffs eased investor concerns about an escalating U. S.-China trade row.
LONDON (Reuters) – Global equity markets rallied and the Japanese yen fell on Tuesday as Chinese President Xi Jinping’s promise to cut import tariffs eased investor concerns about an escalating U. S.-China trade row.
Russian assets extended Monday’s slide as investors digested the new round of U. S. sanctions targeting the country’s tycoons. The Russian ruble plunged more than 4 percent against the dollar to its lowest since late-2016.
Speaking at the Boao Forum for Asia in Hainan province, Xi vowed to open China’s economy, protect intellectual property of foreign firms and he criticized isolationism in his first public comments since the trade dispute with U. S. President Donald Trump’s administration erupted.
Xi’s comments prompted a largely positive reaction in financial markets, which have been rattled over the past week on fears the tit-for-tat U. S.-China tariffs will explode into a full-scale trade war in a blow to global growth.
European markets followed their Asian counterparts at the open with solid gains. Germany’s DAX rose almost 1 percent, France’s CAC 40 0.56 percent and Britain’s FTSE 100 0.46 percent.
The U. S. S&P 500 E-mini futures gained 1.01 percent, suggesting U. S. shares would open positively later on Tuesday.
The MSCI World Index rose 0.27 percent.
“In the current environment markets are grabbing at the slightest hint. Today’s message from Xi contained nothing really new but it seemed like a conciliatory tone and so the market is just grabbing at that,” said Peter Garnry, head of equity strategy at Saxo Bank in Copenhagen.
“It goes back to the fact that there is still uncertainty on trade wars and even if we get a slight indication that it won’t be the worst case scenario, the market reacts positively,” he said, while predicting ongoing trade tensions throughout 2018.
