Europe open: Stocks jump on fresh news of China-US trade talks, but analysts wary
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19:00 18/10/22
Reports of fresh progress in trade talks between China and the US are buoying markets at the start of the session, helping to offset continuing negative headlines from the Emerging Markets space.
On Friday evening, the Journal reported that negotiators from Beijing and Washington were working on a plan to resolve trade tensions by the time of a summit between China's Xi Jinping and Donald Trump in late November.
Nevertheless, some analysts remained wary, with CMC Markets UK's Michael Hewson telling clients that: "As an exercise in clutching at straws this is merely the latest example of the markets looking for a reason to ignore the possibility of any type of escalation in the current situation, where both countries have already slapped $50bn worth of tariffs on each other's goods.
"Nonetheless the prospect that any possible escalation may well be some way away has prompted some investors to tentatively step back into the market, though concerns about the situation in Turkey have kept European markets and investors much more cautious."
Against that backdrop, as of 0827 BST the benchmark Stoxx 600 was higher by 0.35% or 1.35 points to 382.41, alongside a 0.58% or 70.64 point jump for the German Dax to 12,285.18, while the FTSE Mibtel was edging up by 0.22% or 43.54 points and trading at 20,458.07.
To take note of, Monday marked Greece's official exit from its three-year €61.9bn bail-out programme.
Investors were also digesting the result of the first bilateral meeting between German Chancellor Angela Merkel and Russia's Vladimir Putin since 2013 at the weekend, where the two leaders discussed the Nord Stream 2 pipeline, Ukraine, the Iranian nuclear accord and Syria.
In emerging market news, and also on Friday evening, Standard&Poor's cut its rating on Turkey's long-term debt from 'BB-' to 'B+', albeit with a 'positive' outlook.
S&P forecast that the recent extreme volatility in the Turkish lira would see the country slide into recession in 2019.
Reacting to the above, the US dollar was up by 1.32% against the Turkish lira and trading at 6.0972.
Meanwhile, in Venezuela, at the weekend the government devalued the country's currency, the bolivar, by 95%.
News was light on the economic front on Monday morning, with a reading on German producer prices for the month of July printing at up by 0.2% month-on-month and 3.0% on the year according to the country's Ministry of Finance, exactly as expected.
Still on the calendar for later in the session, Eurostat was set to publish a reading on Eurozone construction sector output for the month of July at 1000 BST.
In the corporate patch meanwhile, shares of Italian infrastructure operator Atlantia were skidding 8.51% lower to €17.69 after Italian PM Giuseppe Conte said the company's concession was already in the process of being revoked.