Stock markets rose yesterday as investors bet on China and the US reaching a mini trade deal despite a report saying Beijing was concerned about the chances of an agreement.

The US and China were “now widely seen as de-escalating tensions with a phase one agreement”, said David Cheetham, chief market analyst at trading group XTB.

World equities have been underpinned in recent weeks on optimism that the world’s top two economies will eventually hammer out a mini trade deal as part of a wider agreement.

Frankfurt and London were the standouts in Europe, rising more than 0.5 per cent, while Wall Street showed more modest gains at the opening bell.

Despite trade optimism, investors are not forgetting about bumps in the road, the latest being a CNBC report that China was pessimistic about the chances of a pact because US President Donald Trump is not in favour of rolling back tariffs.

Trump last week denied claims by Beijing that the two sides had put in place a plan to remove levies as the talks progress.

The report again highlighted the fragile nature of the negotiations.

The gains come as the widespread protests that hammered the city’s transport network last week appear to have become less disruptive over the past two days.

Oil prices extended losses.