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Stocks rise on trade talk optimism; rate outlook hits dollar

Reuters  |  NEW YORK 

By Saqib Iqbal Ahmed

NEW YORK (Reuters) - An index of world stocks rose on Monday, adding to Friday's strong gains, on optimism about the outcome of trade talks between and

Growing bets the Federal Reserve will halt its multi-year rate-hike cycle sent the dollar lower across the board, while rising equity markets and support from production cuts helped lift

MSCI's world equity index <.MIWD00000PUS>, which tracks shares in 47 countries, rose 0.88 percent, its highest level since Dec. 19.

The resumption of U.S.-trade talks helped eased concerns On Wall Street about the fallout from an extended trade war between the world's two largest economies. Technology and consumer discretionary shares led gains.

U.S. officials are meeting their counterparts in this week for the first face-to-face talks since U.S. and Chinese agreed in December to a 90-day truce in a trade war that has roiled global markets.

U.S. predicted on Monday that and could reach a trade deal that "we can live with."

"The main thing is the administration's implied progress on talks with That's something that the market sees as very important," said Rick Meckler, partner at in New Vernon,

The Dow Jones Industrial Average <.DJI> rose 98.19 points, or 0.42 percent, to close at 23,531.35, the S&P 500 <.SPX> gained 17.75 points, or 0.70 percent, to finish at 2,549.69 and the Nasdaq Composite <.IXIC> added 84.61 points, or 1.26 percent, to end at 6,823.47.

The gains extended Friday's rise following robust U.S. employment data and a message from the Federal Reserve that it would be patient and flexible in policy decisions this year.

On Friday, told the that is not on a preset path of interest rate hikes and that it will be sensitive to the downside risks markets are in.

European shares edged lower on Monday amid lingering worries about the euro zone and Brexit. The pan-European 600 <.STOXX> finished down 0.15 percent.

In currency markets, the dollar index <.DXY>, which tracks the greenback versus the euro, yen, sterling and three other currencies, was down 0.49 percent at 95.709 amid the diminished expectations for further U.S. rate hikes.

"This is just the re-of U.S. rate hikes going forward. That has been the story for a couple of weeks," said John Doyle, at in

Interest rate futures traders are now in a chance of a small rate cut this year, while the has indicated that two rate hikes are likely.

Gold rose and palladium hit a record high as the weaker dollar spurred demand for the metals from holders of other currencies. Spot gold was up 0.3 percent at $1,288.7 per ounce.

prices fell on Monday, extending losses from Friday, as investors evaluated the likelihood of further Federal Reserve rate hikes this year and as the and resumed trade talks.

10-year notes fell 6/32 in price to yield 2.680 percent, up from 2.659 percent on Friday.

edged higher on Monday, rebounding further from 1-1/2-year lows reached in December, on support from production cuts and steadying equities markets.

Brent crude futures rose 27 cents to settle at $57.33 a barrel, a 0.47 percent gain. U.S. Intermediate (WTI) crude futures rose 56 cents to settle at $48.52 a barrel, a 1.17 percent gain.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by in New York and in Bengaluru; Editing by Susan Thomas, and Dan Grebler)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 08 2019. 03:05 IST