US-China trade truce triggers European share surge

A temporary ceasefire in the US-China trade war boosted global stocks to their highest in about three weeks on Monday, while sending the dollar lower and the Chinese yuan and several trade-dependent currencies higher.

The rally in equities follows an agreement reached between Washington and Beijing at the G20 summit in Argentina on Saturday that calls for a 90-day trade tariff truce. "Most of us were hoping that we would come out of these discussions with no new tariffs and a pause, which is ultimately what we got," said Randy Frederick, vice-president of trading and derivatives for Charles Schwab in Austin, Texas. The pan-European Stoxx 600 index rose 0.98 per cent.

US president Donald Trump said China has agreed to "reduce and remove" tariffs below the 40 per cent level that is currently being charged on US-made vehicles. That helped boost shares of European car makers more than 3 per cent.

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Dublin's Iseq ticked up 28 points to 5,847 but Bank of Ireland and AIB, the State's two main banks, didn't enjoy the general positive mood around European financials, tracking down by 1 per cent and 1.8 per cent respectively. Of the heavy hitters, Smurfit Kappa rose nearly 4 per cent to €24.76 mirroring moves elsewhere. Insulation maker Kingspan was also up nearly 4 per cent at €39.48 while building materials group CRH was up 2 per cent at €24.96, both on foot of more positive trade news internationally. Ryanair, meanwhile, threaded water at €11.67. Food group Kerry was down 2 per cent at €89.40 while rival Glanbia was up marginally at €15.88.

LONDON

Mining and energy stocks led a rally in British equity markets on Monday after Washington and Beijing agreed a ceasefire in their trade conflict, which has upended financial markets, and oil prices surged ahead of an Opec meeting.

Starting the final month of the year on a positive note, the blue-chip index ended the day up 1.4 per cent, gradually easing back after a buoyant open across European markets. At a G20 meeting in Argentina, China and the United States agreed on Saturday to halt additional tariffs and to meet again in 90 days to try to bridge their differences. Mining stocks were among the top gainers, as the news led copper prices to rally to two-month highs, spurring hopes for demand for industrial metals from China, the world's largest consumer. The sector has been hurt by concerns about global economic growth amid the trade row. Antofagasta, Anglo American and BHP were up between 5.9 per cent and 7.8 per cent. But shares in GlaxoSmithKline acted as a drag, losing 7.6 per cent after the drugmaker announced it had agreed to buy US cancer specialist Tesaro for a hefty $5.1 billion. The midcaps of the FTSE 250 were only up 0.45 per cent, with high profile losses. Ted Baker fell more than 15 per cent to its lowest in more than five years after the clothes designer said it had launched an investigation into claims against chief executive Ray Kelvin.

EUROPEAN

The pan-European Stoxx 600 index ended off highs, up 1 per cent, having climbed as much as 2.1 per cent earlier in the day and having been set at one point for its best day in eight months. Germany’s Dax - the most sensitive to China and trade war fears - led the way with a 1.9 per cent rise to its highest level since November 15th. Both the Stoxx 600 and the Dax remain sharply lower so far this year, down around 7 and 11 per cent respectively. “

German carmakers Daimler, BMW, and Volkswagen climbed 2.9 to 4.8 percent, while tyre maker Continental gained 3.3 per cent and Faurecia rose 5.6 per cent. Away from the trade war relief, shares in French supermarkets Carrefour and Casino, fell 5.8 and 3.7 per cent respectively after riots in Paris on Saturday. Argenx topped the Stoxx with an 12.7 per cent gain after the Netherlands-based biopharma company said it had signed a deal worth potentially up to $1.6 billion with Johnson & Johnson affiliate Cilag to develop its Cusatuxumab drug in certain types of cancer. GlaxoSmithKline suffered their biggest one-day drop in more than a decade,

NEW YORK

Strong gains in Apple and Microsoft pushed the technology sector higher by 1.76 per cent. Apple, which gained 1.8 per cent, was hit last week by worries over the next round of tariffs possibly being placed on the company's iPhones. "Sectors like technology have been beaten up quite a bit due to their international exposure, since today we are in 'up' mode, we will see investors looking to get back into these names," said Randy Frederick, vice-president of trading and derivatives for Charles Schwab in Austin, Texas. The trade-sensitive industrials sector rose 1.87 per cent with bellwethers Caterpillar and Boeing up about 5 per cent each. The benchmark S&P 500 index and the Nasdaq rose to their highest in over three weeks. US carmakers General Motors, Ford Motor and Tesla rose between 2.4 per cent and 4 per cent. Energy stocks rose 2 per cent as crude prices surged, helping lift Exxon Mobil up by 1.5 per cent and Chevron by 2 per cent. - Additional reporting Reuters