World equities rose yesterday as investors bet on Beijing and Washington resolving their trade war, despite news of a doubling in US tariffs on Chinese goods, dealers said.
In a brief respite from trade woes, Uber was set for its Wall Street debut Friday with a vast share offering that values the ride-hailing giant at over $82 billion.
US President Donald Trump has pulled the trigger on a steep increase in tariffs on Chinese goods, ramping up punitive duties on $200 billion in imports from 10 to 25 per cent in a major escalation of the bitter trade war between the world's two biggest economies.
However, Russ Mould, investment director at stockbroker AJ Bell, said markets were adopting a wait-and-see approach and he suspected that a deal would eventually be clinched.
“Investors hate uncertainty as it leads to speculation about what might and might not happen. Once they have the real facts, investors can properly assess the situation,” Mould told AFP.
In late morning deals, London stocks were up 0.4 per cent, as investors welcomed official data showing that the UK economy strengthened with 0.5-per cent growth in the first quarter from 0.2 per cent in the prior three months.
In the eurozone, Paris stocks gained 0.8 per cent and Frankfurt jumped 1.1 per cent.
In Asia, Shanghai led gains at the end of a torrid week for equities, with investors nevertheless keeping a eye on ongoing China-US trade talks in Washington. Both Shanghai and Hong Kong bounced back on hopes the economic superpowers will be able to reach a deal to avert a trade war that most observers warn could shatter global growth and batter markets.
But China has vowed to hit back at the tariffs hike, saying it “deeply” regretted the US move.
The tariffs came in after the first day of high-stakes negotiations in Washington between Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
The slightly improved sentiment provided support to higher-yielding, riskier currencies, with the yuan edging higher though it continues to wallow around four-month lows.
However, in a worrying sign, Hu Xijin, editor-in-chief of the Global Times which is published by the Communist Party's People's Daily cited a source familiar with the talks as saying there is “zero” chance of a deal before Friday.
Elsewhere Friday, oil prices edged higher but Oanda analyst Jeffrey Halley warned that failure of the trade talks “would be the straw that breaks the camel's back” and send the commodity tumbling, despite supply worries stemming from US-Iran tensions and Venezuela's political crisis.
Later on Friday, San Francisco-based Uber was set to begin trading on the New York Stock Exchange, priced at $45 per share, in one of the largest initial public offerings in the tech sector.