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NEW YORK, United States – Global stocks pushed higher Wednesday on renewed optimism over talks to resolve the China-US trade war, while oil prices surged after Saudi Arabia confirmed it was on track to trim crude exports.
Europe’s major stock markets followed Asian exchanges higher, with Frankfurt and Paris both ending day 0.8 percent higher. London rose 0.7 percent.
Wall Street also had a solid day, with major indices rising for a fourth straight session.
Gains in the US moderated somewhat in the final 40 minutes of trading after talks to end the US government shutdown between President Donald Trump and congressional Democratic leaders broke down. But the S&P 500 still finished 0.4 percent higher.
“Stocks were extremely oversold,” said Bill Lynch of Hinsdale Associates. “There’s optimism today that the market can continue to be strong.”
Brent crude oil pushed above $61 per barrel, with OPEC cutting output and concerns easing over weak demand growth.
The dollar, meanwhile, sank to its lowest level against the euro since October as Federal Reserve meeting minutes, and statements from Fed officials, made clear the US central bank was in no hurry to hike interest rates again soon.
The dollar also declined against the British pound, despite lingering uncertainty over Brexit.
On Wednesday, in a setback to Theresa May, British lawmakers voted to force the prime minister to quickly set out an alternative plan for Brexit if she loses a crucial vote on her EU withdrawal deal next week.
After taking a battering in December and suffering a shaky start to 2019, confidence is slowly returning to equity trading floors.
The gains follow calming comments last week from Federal Reserve Chair Jerome Powell, followed by apparent progress in the US-China talks.
A member of the US delegation, Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney, told reporters that the talks “went just fine.”
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.
Oil surges back from lows
Oil prices — which have tumbled in recent months partly because of worries about the impact on demand of the China-US trade war — rose sharply after Saudi officials said they were committed to implementing the latest OPEC agreement to boost prices.
Saudi Energy Minister Khalid al-Falih said the kingdom, the world’s top crude supplier, would cut its exports to 7.2 million barrels a day in January, down from 8.0 million bpd in November.
“We are serious about restoring balance to the market,” Falih told a press conference in Riyadh.
“We are concerned about volatility in the oil market,” he said. “We have seen peaks and drops in prices (that are) completely unjustified by the fundamentals.”
Brent has climbed some 20 percent compared with just two weeks ago, prior to an oil production cut by OPEC and non-cartel producers from January 1. /cbb