World shares edge higher on U.S.-China trade deal hopes

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Global shares rose on Monday amid growing optimism the United States and China will reach a trade agreement as soon as this month.

U.S. President Donald Trump and Chinese President Xi Jinping might seal a formal trade deal around March 27, given progress in talks between the two countries, the Wall Street Journal reported on Sunday.

The two nations have imposed tit-for-tat tariffs on billions of dollars worth of each others’ goods, roiling financial markets, disrupting manufacturing supply chains and shrinking U.S. farm exports.

A source briefed on the negotiations told Reuters the two countries appear close to a deal that would roll back U.S. tariffs on at least $200 billion worth of Chinese goods.

Stock markets welcomed the news, with European markets following their Asian counterparts higher. The pan-European STOXX 600 index was up 0.4 percent.

MSCI’s All Country World Index, which tracks shares in 47 countries, was up 0.1 percent on the day.

“The key question is – will all tariffs will be removed instantly, or will they be gradually dialled back?” 

“While the renewed risk appetite is seen boosting European and U.S. stocks, investors should consider how much upside is left, given that markets have been actively pricing in the possible resolution to the trade saga,” wrote Lukman Otunuga, research analyst at FXTM.

E-mini futures for the S&P 500 index of U.S. stocks were up 0.3 percent in London.

In Asia, Chinese shares were the biggest gainers, with the blue-chip index up as much as 3 percent. The CSI300 index rallied last week after index provider MSCI quadrupled its weighting for mainland shares in its global benchmarks.

Australian shares rose 0.4 percent and Hong Kong’s Hang Seng index added 0.7 percent.

That left MSCI’s broadest index of Asia-Pacific shares outside Japan with gains of 0.3 percent. The index has risen almost 10 percent so far this year.

Peace PIAK