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World stocks rally on hopes for U.S.-China trade deal

Reuters  |  NEW YORK 

By David Randall

NEW YORK (Reuters) - Signs that the and might reach an agreement in trade talks and of a tentative deal to avoid another government shutdown in helped push world stock markets and bond yields broadly higher Tuesday.

Tokyo's Nikkei set the tone with a 2.6 percent rally, its best day of the year so far [.T], while the Stoxx 600 index of European shares gained 0.5 percent.

On Wall Street, the Dow Jones Industrial Average rose 316.23 points, or 1.26 percent, to 25,369.34, the S&P 500 gained 30.84 points, or 1.14 percent, to 2,740.64 and the Nasdaq Composite added 90.91 points, or 1.24 percent, to 7,398.81 in midday trading.

MSCI's gauge of stocks across the globe gained 1.05 percent.

U.S. and Chinese officials expressed hopes that the new round of talks, which began in on Monday, would bring them closer to easing their nearly year-long trade war.

and are trying to hammer out a deal before a March 1 deadline, without which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

"There will be no winner in a trade war. So at some point they will likely strike a deal," said Mutsumi Kagawa, at in

In Washington, U.S. lawmakers reached a tentative deal on border security funding, though aides cautioned that it did not contain the $5.7 billion wants to build a wall on the Mexican border.

"What investors are taking from this is that the government stays open, whether or not Trump signs on the deal is secondary," said Peter Cardillo, at in New York.

The dollar, meanwhile, slipped slightly but hovered near a two-month high after notching its longest winning streak - eight days straight - in two years.

The dollar index fell 0.27 percent, with the euro up 0.38 percent to $1.1318.

The optimism that another government shutdown in the world's largest economy would be averted and trade tensions between the and were easing helped push bond yields higher as investors traded out of safety plays.

Benchmark 10-year notes last fell 7/32 in price to yield 2.6859 percent, up from 2.661 percent late on Monday.

In commodity markets, jumped up as traders weighed support from OPEC-led supply restraint and a slowdown in the global economy. U.S. crude rose 2 percent to $53.49 per barrel and Brent gained 2. percent to $62.77..

(Reporting by David Randall; Editing by and Dan Grebler)

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

First Published: Tue, February 12 2019. 23:24 IST