OPENING CALL: The Australian share market is expected to open higher. The SPI200 futures contract expected to open up 34 points.
Signs of optimism that the U.K. could reach a divorce deal with the European Union drove the pound and U.K bank stocks sharply higher.
General Motors and the United Auto Workers accused each other of not working hard enough to reach a new four-year contract, end the 26-day strike and put 46,000 full-time factory employees back to work.
Overnight Summary
Each Market in Focus
Australia’s S&P/ASX 200 closed 0.9% higher at 6606.8, taking its weekly gain to 1.4% as U.S.-China trade optimism buoyed global stock markets.
Gains in Australia were broad-based, with miner BHP adding 2.1%, Commonwealth Bank of Australia gaining 0.9% and biotech company CSL climbing 2.0%.
U.S. stocks surged as investors cheered progress on trade negotiations between the U.S. and China, helping the S&P 500 break a three-week losing streak.
President Trump said just before the closing bell that the two countries reached a “very substantial Phase One deal” and agreed not to implement tariffs set to go into effect next week. China, meanwhile, said it would increase purchases of U.S. agricultural products.
Friday’s talks elicited optimism among investors and helped pull the S&P 500 and Dow Jones Industrial Average within 2% of their July records. Trade tensions have been a key driver of market volatility this year as investors have reacted to fresh tariffs between the two countries–and tweets from President Trump on the state of the talks.
In a sign of how eager investors have been for a resolution on trade, anticipation of a deal was enough to lure some investors back into stocks and push them out of traditionally safer bets like gold, the Japanese yen and Treasurys.
The Dow industrials closed up 319.92 points, or 1.2%, to 26816.59. The index rose as much as 517 points earlier in the session but pared some of those gains as traders learned that two pressure points remained unresolved: a final decision on a new round of tariffs set for December and policies around Chinese telecom giant Huawei Technologies Co.
The S&P 500 surged 32.14 points, or 1.1%, to 2970.27. The rally was broad-based, with eight of the S&P 500’s 11 sectors climbing. Both the Dow and S&P 500 averted a fourth straight week of losses.
The Nasdaq Composite added 106.26 points, or 1.3%, to 8057.04.
Shares of industrials companies were among the biggest gainers. Caterpillar, which has been a bellwether stock for trade, recorded its biggest jump since January, adding $5.71, or 4.7%, to $128.40. Apple shares rose $6.12, or 2.7%, to $236.21, a fresh record.
Around the time gold futures settled, Bloomberg News reported that the U.S. and China reached a tentative partial agreement that may lead to a truce in the trade war. As part of the pact, China would agree to some agricultural concessions, while the U.S. would provide some relief on tariffs, the report said.
December gold on Comex fell $12.20, or 0.8%, to settle at $1,488.70 an ounce, falling further below the psychologically significant level at $1,500, but ending above the day’s low of $1,478. The most-active gold futures contract marked its lowest settlement and sharpest daily slump since Sept. 30, according to FactSet data. For the week, gold lost 1.6%–the biggest weekly percentage drop for the contract in over seven months.
Meanwhile, December silver lost 5.8 cents, or 0.3%, to end at $17.544 an ounce, with gold’s sister metal logging a weekly decline of 0.5%.
In other metals dealings, December copper added 0.6% to $2.628 a pound, for a weekly rise of 2.6%. January platinum shed 0.8% to $900.30 an ounce, paring its weekly rise to around 1.5%. December palladium settled at $1,670.10 an ounce, down 0.4% Friday, though still saw a weekly climb of 1.7% after settling at a record high Thursday.
The global benchmark, December Brent crude added $1.41, or 2.4%, to $60.51 a barrel on ICE Futures Europe, for a weekly gain of 3.7%. Both benchmarks had posted losses in each of the previous two weeks in a row.
Growing hopes that U.K. and European leaders can reach an agreed deal for Britain to leave the European Union pushed the British pound higher for a second day.
The pound rose as high as $1.2663, up from $1.2444 on Thursday, a day when the U.K. currency had its best single day percentage advance since March. It’s the strongest sterling has been since Theresa May was prime minister. Boris Johnson stepped into the No. 10 Downing Street on July 24.
European Council President Donald Tusk — who has tweeted criticism at British Prime Minister Boris Johnson — on Friday said he received promising signals from Ireland’s Leo Varadkar that a deal is possible.
The Times newspaper reported that Johnson on Thursday gave some ground on the issue of Northern Ireland.
Hong Kong’s Hang Seng Index ended the session 2.3% higher at 26308.44, the highest percentage gain in over a month. Nearly all stocks on the index closed in the green, as the U.S.-China trade talks showed optimistic progress overnight.
Exporters and manufacturers lead the rise, with electronics maker Techtronics Industries surging 6.3% and clothing supplier Shenzhou International gaining 3.8%. Oil explorers also rise amid an oil price jump. CNOOC ends 4.7% higher while PetroChina adds 3.3%. Hong Kong developers benefit from the improvement in sentiment as well, with
Henderson Land up 3.8% and Sun Hung Kai Properties rising 3.7%.
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