Global markets: World stocks rise to highest in two weeks

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World stock markets rose to their highest level in more than two weeks on Monday as reassuring comments from the U.S. Federal Reserve chief, Jerome Powell affirmed that the U.S. central bank was sticking with its strategy of gradual rate hikes to protect economic growth sparked a rally in stocks that gathered pace as a new week swung into gear.

A stronger-than-expected German business sentiment survey added to the upbeat mood in Europe, with stock markets in Paris and Frankfurt up by 0.4 percent each.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1.1 percent and Japan’s blue-chip Nikkei closed at a 10-week high .N225.

That left the MSCI All-Country World index .MIWD00000PUS, which tracks shares in 47 countries, at its highest level since Aug. 9.

In a bid to brighten the mood, U.S. and Mexican trade negotiators are seen as close to reaching a common position on the North American Free Trade Agreement (NAFTA), with Mexican Economy Minister Ildefonso Guajardo saying on Sunday talks have “continued to make progress”.

The talks will resume on Monday and a positive outcome is expected to ease concerns about an escalation in global trade tensions.

“The (NAFTA) talks add to the sense that while the U.S. is still bogged down in its trade conflict with China, it is perhaps more willing to compromise elsewhere such as with Mexico and the EU. It is decreasing the risk of a global trade war,” said Ulrich Leuchtmann, head of FX and emerging market research at Commerzbank in Frankfurt.

Peace PIAK