Wall Street rallied on Monday, boosted by trade optimism and tracking gains in global stocks, while the pound fluctuated against the backdrop of the Brexit drama.
The S&P 500 advanced 0.7 per cent and climbed back above 3,000 to its highest level in more than a month, supported by hopes the US and China are moving towards a trade pact. The benchmark index is once again within striking distance of a record high, now sitting 0.6 per cent from its July peak.
The tech-heavy Nasdaq rose 0.9 per cent. The Dow’s gains, at 0.2 per cent, were capped by declines in shares of Boeing.
The moves — which kick off a busy week in corporate earnings — follow an advance for European equities that saw the broad Euro Stoxx 600 rise 0.6 per cent and France’s Cac 40 gain 0.2 per cent.
Germany’s Dax was up 0.9 per cent, although the country’s central bank warned that Europe’s largest economy may have entered recession during the third quarter.
London’s FTSE 100 was up 0.2 per cent, while the pound wavered throughout the session. Sterling was recently 0.1 per cent weaker against the dollar. Prime Minister Boris Johnson was denied a second “meaningful vote” on his new Brexit deal after MPs in effect voted on Saturday to delay giving their approval. Parliament is expected to vote on the withdrawal agreement on Tuesday.
“Sterling has given back a bit of ground, but with the prospects of a no-deal outcome seeming to dim, that weakness may prove shortlived,” said Robert Carnell, head of Asia-Pacific research at ING.
Japan’s Topix led gains in Asian markets with a 0.4 per cent rise. China’s CSI 300 of Shanghai- and Shenzhen-listed stocks was up 0.3 per cent after the central bank left two benchmark lending rates unchanged. Hong Kong’s Hang Seng index finished fractionally higher.
There is “little in the pipeline to alter risk sentiment from last week”, said Jingyi Pan, markets strategist at IG Group, with traders focused on any new potential developments on the US-China trade front. “Investors remain in anticipation of the US-China phase one deal signing in November,” Ms Pan added.
President Donald Trump on Friday indicated that a trade deal could be signed by mid-November.
Larry Kudlow, the president’s top economic adviser, said Monday that tariffs scheduled to go into effect in December could be scrapped if talks over the “phase one” deal go well. The negotiations were “looking pretty good”, Mr Kudlow said in an interview with Fox Business Network.