European stocks regain composure on US-China trade talk news

LONDON: European and US stocks rebounded on Thursday (Aug 16) on news that Beijing and Washington will hold trade talks, while the Turkish lira rose after Qatar offered to invest US$15 billion in Turkey.

Frankfurt, London and Paris clawed back much of their losses of more than 1.5 per cent the previous day on Turkey fears and Chinese growth concerns.

Meanwhile on Wall Street, the Dow shot 1.4 per cent higher in late morning trading.

"Equity markets have bounced back as traders are a little less fearful about China's slowdown as they once were," said analyst David Madden at CMC Markets UK.

"There are still legitimate fears about China's economy, but for now, bargain hunters are content to snap up copper, and mining stocks like Glencore, BHP Billiton and Rio Tinto," he added.

China's Vice Commerce Minister Wang Shouwen, the deputy representative on international trade negotiations, will meet senior US treasury official David Malpass at Washington's invitation, Beijing said in a statement.

Traders saw a glimmer of hope of an easing in the ongoing trade battle that has seen the two sides hit each other with reciprocal tariffs on goods worth US$34 billion.

Washington and Beijing plan to launch a new round of tariffs on US$16 billion worth of goods from each country on Aug 23.

Earlier, Asian indices fell on concerns over Turkey's crisis, but losses were capped by hopes of an end to the tit-for-tat trade war between China and the United States.

MODEST RECOVERY

Emerging market currencies staged a modest recovery after a tumultuous week for the Turkish lira, which plumbed record lows against the dollar at the start of the week.

The lira's plunge - ongoing for weeks - turned into a rout last Friday when US President Donald Trump tweeted that his administration was doubling aluminium and steel tariffs for Turkey.

Trump's decision was made amid a bitter row over Ankara's detention of an American pastor. President Recep Tayyip Erdogan said Turkey is facing an "economic attack".

The lira has clawed back some ground in recent days as regulators cut the ability to speculate against the currency.

It held onto gains on Thursday as the country's finance minister told foreign investors that Turkey would emerge stronger from the crisis and has no need for an IMF bailout.

BAYER TUMBLES AGAIN

In Europe on Thursday, London stocks were aided by strong UK retail sales data for July.

Frankfurt meanwhile gained 0.6 per cent, despite another slump in the share price of Bayer.

Shares in the German chemicals and pharmaceuticals giant fell 4.6 per cent to €77.05, rocked by media reports of new legal risks stemming from its acquisition of US seeds and pesticides maker Monsanto.

The stock had fallen even more dramatically on Monday after a US jury ordered it to pay almost US$290 million in damages to a dying California groundskeeper who said Monsanto's blockbuster weedkiller Roundup - whose active ingredient is glyphosate - had caused his cancer.

Key figures around 1530 GMT:

New York - Dow Jones: UP 1.4 per cent at 25,508.09 points

London - FTSE 100: UP 0.8 per cent at 7,556.38 (close)

Frankfurt - DAX 30: UP 0.6 per cent at 12,237.17 (close)

Paris - CAC 40: UP 0.8 per cent at 5,349.02 (close)

EURO STOXX 50: UP 0.7 per cent at 3,381.09

Dollar/Turkish lira: DOWN at 5.78 lira from 5.94 lira late on Wednesday

Euro/Turkish lira: DOWN at 6.62 lira from 6.74 lira

Euro/dollar: UP at US$1.1393 from US$1.1345

Pound/dollar: UP at US$1.2726 from US$1.2697

Dollar/yen: UNCHANGED at 110.74 yen

Tokyo - Nikkei 225: DOWN 0.1 per cent at 22,192.04 (close)

Hong Kong - Hang Seng: DOWN 0.8 per cent at 27,100.06 (close)

Shanghai - Composite: DOWN 0.7 per cent at 2,705.19 (close)

Oil - Brent Crude: UP 18 cents at US$70.94 per barrel

Oil - West Texas Intermediate: UP 23 cents at US$65.24 per barrel