Global markets rallied yesterday on renewed optimism over talks on the China-US trade war, while oil prices were energised by fading supply and demand concerns.
Europe’s major stock markets followed Asian exchanges higher, with Frankfurt, Paris and London each adding at least one per cent.
Wall Street also opened higher, adding to gains the previous day, with the Dow climbing 0.5 per cent in the first minute of trading.
Brent crude oil pushed above $60 per barrel, with Opec cutting output and concerns easing over weak demand growth.
Upbeat sentiment has this week sent investors back into equities, which are traditionally regarded as a riskier bet.
After taking a battering in December and suffering a shaky start to 2019, confidence is slowly returning to equity trading floors.
Federal Reserve boss Jerome Powell provided the platform for a rally last week when he said the US central bank had no “pre-set” plan for lifting interest rates and was “listening” to markets, signalling that the pace of hikes could slow this year.
Fear of higher borrowing rates was a major cause of last year's stocks losses.
The positive mood among dealers held this week as officials from China and the US hunkered down for trade negotiations in Beijing that were extended into a third day. Donald Trump on Tuesday des-cribed them as going “very well”. Bloomberg also reported White House sources as saying Mr Trump is keen to get a deal done in order to boost stock markets which he regards as a gauge of his success.
The Wall Street Journal said the two sides were moving in the right direction, with China ready to buy more US goods and services, while further talks at cabinet level were being lined up next week.
The global gains also come after a strong reading on US jobs creation Friday, which soothed worries that the American economy was slowing down, and ahead of the corporate earnings season.
Oil prices – which have tumbled in recent months partly because of worries about the impact on demand of the China-US trade war – were also on the up.
Brent has climbed some 20 per cent compared with just two weeks ago, prior to an oil production cut by the Organization of the Petroleum Exporting Countries and non-cartel producers from January 1.
Brent and the world’s other key contract, WTI, had slumped late last year, hitting 18-month lows at $49.93 and $42.36 respectively.
To shore up sagging prices, OPEC and non-Opec members, notably Russia, agreed in December to trim production by 1.2 million barrels a day from the start of this year.